NIST Special Publication 916

MEP SUCCESSES:

A CASE STUDY APPROACH

Manufactucturing Extension Partnership

National Institute of Standards and Technology

Gaithersburg, MD 20899-0001

May 1997

U.S. Department of Commerce

William M. Daley, Secretary

Technology Administration

Mary L. Good, Under Secretary for Technology

National Institute of Standards and Technology

Robert E. Hebner, Acting Director
National Institute of Standards U.S. Government Printing Office and Technology Washington: 1997

Special Publication 916

Natl. Inst. Stand. Technol.

Spec. Publ. 916

208 pages (May 1997)

CODEN: NSPUE2

For sale by the Superintendent

of Docunnents

U.S. Government Printing Office Washington, DC 20402
E F A C E

This compendium of 24 case studies was

developed through the cooperative effort of

individuals from across the country who work at,

or are directly affiliated with, 17 manufacturing

extension centers. All 17 are members of the Manufacturing Extension Partnership (MEP), a

national network of manufacturing extension

centers in all 50 states and Puerto Rico whose

collective mission is to improve the global

competitiveness of small and medium-sized

U.S. manufacturers. MEP is supported and

coordinated by the National Institute of

Standards and Technology.

Nothing describes the value of MEP assistance

better than stories of our client interactions. This

collection captures the daily "nuts and bolts"

activity of MEP field engineers, the wide variety of

services the program offers and the major

improvements in competitiveness of client firms

that MEP assistance can produce.

For more information, or to contact the MEP

center serving your area, call 1-800-MEP-4MFG.

NIST MEP in Gaithersburg, MD, the program's

headquarters, can be contacted at 301-975-5020,

or via our website at http://www.mep.nist.gov/.

iii

CONTENT

SECTION • PAGE

Preface iii MEP Centers Completing Case Studies by Region and State vii Case Study Index ix

State ix

Industry xi

Type of Technical Assistance Project xiii

I. PROFILES

Baron Industries Corporation 1-1

Braunstein, Inc. 1-2

Buerk Tool and Machine Company, Inc. 1-3

Carver Pump Company 1-4

Century Aero Products International, Inc. 1-5 Cheraw Yarn Mills, Inc. 1-6

Conservation Alliance, Inc. 1-7 Custom Materials 1-8

D.J. Manufacturing, Inc. 1-9

Extrusion Technology, Inc. 1-10

Galileo Corporation 1-11

Glendale Technologies Corporation 1-12

Haas-Jordan Co., Inc. 1-13

Ithaca Peripherals, Inc. 1-14

KDdids, Inc. 1-15

Kintz Plastics, Inc. 1-16

Luitpold Pharmaceuticals, Inc. 1-17

Marplex, Inc. 1-18 RCF Seals & Couplings, Inc. 1-19

Shakespeare Electronics and Fiberglass 1-20 Sherwood Plastics, Inc. 1-21

Timberlyne Cabinet Company 1-22

Trident, Inc. 1-23

Walker Systems, Inc. i-24

V
II. CASE STUDIES

Baron Industries Corporation 11-1

Braunstein, Inc. 11-11

Buerk Tool and Machine Company, Inc. 11-19

Carver Pump Company 11-27

Century Aero Products International, Inc. 11-35 Cheraw Yarn Mills, Inc. 11-41

Conservation Alliance, Inc. 11-47 Custom Materials 11-53

D.J. Manufacturing, Inc. 11-59

Extrusion Technology, Inc. 11-65

Galileo Corporation 11-75

Glendale Technologies Corporation 11-85

Haas-Jordan Co., Inc. 11-93

Ithaca Peripherals, Inc. ^ , 11-101 KD dids. Inc. ' 11-113

Kintz Plastics, Inc. 11-123

Luitpold Pharmaceuticals, Inc. 11-131

Marplex, Inc. 11-137 RCF Seals & Couplings, Inc. 11-149 Shakespeare Electronics and Fiberglass 11-159 Sherwood Plastics, Inc. 11-165

Timberlyne Cabinet Company 11-177

Trident, Inc. 11-191 Walker Systems, Inc. 11-197

vi

I
CASE STUDY INDEX

STATE

CALIFORNIA

Century Aero Products International, Inc. (CAP)

California Manufacturing Technology Center (CMTC) 11-35 CONNECTICUT

Conservation Alliance, Inc. (CAI) CONN/STEP 11-47

Trident, Inc. (Trident) CONN/STEP 11-191 GEORGIA

Baron Industries Corporation (Baron)

Georgia Manufacturing

Extension Alliance (GMEA) 11-1 RCF Seals & Couplings, Inc. (RCF)

Georgia Manufacturing

Extension Alliance (GMEA)

ILLINOIS

Glendale Technologies Corporation (GTC)

Chicago Manufacturing Center (CMC)

11-149

11-85 IOWA

Carver Pump Company (Carver) Iowa Manufacturing Technology Center (IMTC) 11-27 MASSACHUSETTS

Extrusion Technology, Inc. (Extrusion) Massachusetts Manufacturing Partnership (MMP) at the

Bay State Skills Corporation 11-55

Galileo Corporation (Galileo) Massachusetts Manufacturing Partnership (MMP) at the

Bay State Skills Corporation 11-75

ix
NEW YORK

Braunstein, Inc. (Braunstein)

Industrial Technology Assistance Corporation (ITAC) 11-1

Buerk Tool and Machine Co., Inc. (Buerk) Western New York Technology Development Center, Inc. (WNYTDC) 11-19

Ithaca Peripherals, Inc. (IP)

Alliance for Manufacturing and Technology (AM&T) 11-101 KD dids, Inc. (KD dids)

Industrial Technology Assistance Corporation (ITAC) 11-1 1

Kintz Plastics, Inc. (Kintz) Center for Economic Growth (CEG) 11-1 23

Luitpold Pharmaceuticals, Inc. (Luitpold)

Long Island Forum for Technology (LIFT) 11-131 NORTH CAROLINA

Timberlyne Cabinet Company (Timberlyne)

North Carolina Manufacturing Extension Project (NCMEP),

Center for Economics Research 11-1 77

OHIO

Custom Materials (Custom)

Great Lakes Manufacturing Technology Center (GLMTC) 11-53

Haas-Jordan Co., Inc. (Haas-Jordan)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systems Center (EISC) 11-93 Sherwood Plastics, Inc. (Sherwood)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systems Center (EISC) 11-1 65

SOUTH CAROLINA

Cheraw Yarn Mills, Inc. (Cheraw)

Southeast Manufacturing Technical Center (SMTC) 11-41 Shakespeare Electronics and Fiberglass (Shakespeare) Southeast Manufacturing Technology Center (SMTC) 11-1 59

WEST VIRGINIA

D.J. Manufactunng, Inc. (DJMI)

The West Virginia Partnership for Industrial Modernization

(WVPIM) 11-59 Walker Systems, Inc. (WSI)

The West Virginia Partnership for Industrial Modernization

(WVPIM) 11-197

X
WISCONSIN

Marpiex, Inc. (Marplex)

Northwest Wisconsin IVlanufacturing Outreach Center (NWMOC)

INDUSTRY

AEROSPACE

Century Aero Products International, Inc. (CAP)

California Manufacturing Technology Center (CMTC)

RCF Seals & Couplings, Inc. (RCF)

Georgia Manufacturing Extension Alliance (GMEA)

ALUMINUM MANUFACTURING

Extrusion Technology, Inc. (Extrusion) Massachusetts Manufacturing Partnership (MMP) at the Bay State Skills Corporation

APPLIANCE

Baron Industries Corporation (Baron)

Georgia Manufacturing Extension Alliance (GMEA)

AUTOMOTIVE AND TRUCKING

Sherwood Plastics, Inc. (Sherwood)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systems Center (EISC)

COAL MINING

D.J. Manufacturing, Inc. (DJMI)

The West Virginia Partnership for Industrial Modernization

(WVPIM)

COMPUTER SYSTEMS

Glendale Technologies Corporation (GTC)

Chicago Manufacturing Center (CMC)

ELECTRICAL

Carver Punnp Company (Carver) Iowa Manufacturing Technology Center (IMTC)

Custom Materials (Custom)

Great Lakes Manufacturing Technology Center (GLMTC)

Galileo Corporation (Galileo) Massachusetts Manufacturing Partnership (MMP) at the

Bay State Skills Corporation

xi
Walker Systems, Inc. (WSI)

The West Virginia Partnership for Industrial Modernization

(WVPIM)

JEWELRY

Braunstein, Inc. (Braunstein)

Industrial Technology Assistance Corporation (ITAC) MACHINERY

Buerk Tool and Machine Co., Inc. (Buerk) Western New York Technology Development Center, Inc. (WNYTDC)

PHARMACEUTICAL

Luitpold Pharmaceuticals, Inc. (Luitpold)

Long Island Forum for Technology (LIFT) " '

,^ PLASTICS

Conservation Alliance, Inc. (CAI) CONN/STEP

Haas-Jordan Co., Inc. (Haas-Jordan)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systems Center (EISC)

Kintz Plastics, Inc. (Kintz) Center for Economic Growth (CEG)

Sherwood Plastics, Inc. (Sherwood)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systems Center (EISC)

PRINTING

Ithaca Penpherals, Inc. (IP)

Alliance for Manufacturing and Technology (AM&T)

Trident, Inc. (Trident) CONN/STEP

SPORTINGGOODS

Haas-Jordan Co., Inc. (Haas-Jordan)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systems Center (EISC) Shakespeare Electronics and Fiberglass (Shakespeare) Southeast Manufacturing Technical Center (SMTC)

xii
TEXTILE

Cheraw Yarn Mills, Inc. (Cheraw)

Southeast Manufacturing Technical Center (SMTC) 11-41 Haas-Jordan Co., Inc. (Haas-Jordan)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison industrial Systems Center (EISC) 11-93 KD dids. Inc. (KD dids)

Industrial Technology Assistance Corporation (ITAC) 11-1 1

WOOD PRODUCTS

Tinnberlyne Cabinet Company (Timberlyne) North Carolina Manufacturing Extension Project (NCMEP),

Center for Economics Research 11-1 77

Marplex, Inc. (Marplex)

Northwest Wisconsin Manufacturing Outreach Center (NWMOC) 11-137

TYPE OF TECHNICAL ASSISTANCE PROJECT

BUSINESS DEVELOPMENT

Glendale Technologies Corporation (GTC)

Chicago Manufacturing Center (CMC) 11-85 KD dids. Inc. (KD dids)

Industrial Technology Assistance Corporation (ITAC) 11-1 1

COMMUNICATIONS

Extrusion Technology, Inc. (Extrusion) Massachusetts Manufacturing Partnership (MMP) at the

Bay State Skills Corporation 11-65

C USTOMER SATISFACTION

Ithaca Peripherals, Inc. (IP)

Alliance for Manufacturing and Technology 11-101 HUMAN RESOURCES PRODUCTIVITY

Braunstein, Inc. (Braunstein)

Industrial Technology Assistance Corporation (ITAC) li-1

Extrusion Technology, Inc. (Extrusion)

Massachusetts Manufacturing Partnership (MMP) at

the Bay State Skills Corporation 11-55

Galileo Corporation (Galileo) Massachusetts Manufacturing Partnership (MMP) at

the Bay State Skills Corporation 11-75

xiii
KD dids, Inc. (KD dids)

Industrial Technology Assistance Corporation (ITAC)

Luitpold Pharmaceuticals, Inc. (Luitpold)

Long Island Forum for Technology (LIFT)

ISO-9000 CERTIFICATION

Carver Pump Company (Carver) Iowa Manufacturing Technology Center (IMTC)

Cheraw Yarn Mills, Inc. (Cheraw)

Southeast Manufacturing Technology Center (SMTC)

Kintz Plastics, Inc. (Kintz) Center for Economic Growth (CEG)

Luitpold Pharmaceuticals, Inc. (Luitpold)

Long Island Forum for Technology (LIFT) MANAGEMENT INFORMATION SYSTEMS

Baron Industries Corporation (Baron)

Georgia Manufacturing Extension Alliance (GMEA)

Ithaca Peripherals, Inc. (IP)

Alliance for Manufacturing and Technology (AM&T)

Sherwood Plastics, Inc. (Sherwood)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systems Center (EISC)

M A N U F A C T U R I N G P R O C E S S Conservation Alliance, Inc. (CAI) CONN/STEP

Custom Materials (Custom) .

Great Lakes Manufacturing Technology Center (GLMTC)

D.J. Manufacturing, Inc. (DJMI)

The West Virginia Partnership for Industrial Modernization

(WVPIM)

Galileo Corporation (Galileo) Massachusetts Manufacturing Partnership (MMP) at the Bay State Skills Corporation

Haas-Jordan Co., Inc. (Haas-Jordan) Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systems Center (EISC)

Ithaca Peripherals, Inc. (IP)

Alliance for Manufacturing and Technology (AM&T)

xiv
Marplex, Inc. (Marplex)

Northwest Wisconsin Manufacturing Outreach Center (NWMOC) 11-137 Sherwood Plastics, Inc. (Sherwood)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systems Center (EISC) 11-165 Timberlyne Cabinet Company (Timberlyne) North Carolina Manufacturing Extension Project (NCMEP),

Center for Economics Research ll-l 77

Trident, Inc. (Trident) CONN/STEP ' 11-191 Walker Systems, Inc. (WSI)

The West Virginia Partnership for Industrial Modernization

(WVPIM) 11-197 MARKETING AND SALES

Carver Pump Company (Carver) Iowa Manufacturing Technology Center (IMTC) 11-27

Extrusion Technology, Inc. (Extrusion) Massachusetts Manufacturing Partnership (MMP) at

the Bay State Skills Corporation 11-65

Galileo Corporation (Galileo) Massachusetts Manufacturing Partnership (MMP) at

the Bay State Skills Corporation 11-75

Glendale Technologies Corporation (GTC)

Chicago Manufacturing Center (CMC) 11-85

Luitpold Pharmaceuticals, Inc. (Luitpold)

Long Island Forum for Technology (LIFT) 11-131

PLANT LAYOUT

Baron Industries Corporation (Baron)

Georgia Manufacturing Extension Alliance (GMEA) 11-1

Buerk Tool and Machine Co., Inc. (Buerk) Western New York Technology Development Center, Inc. (WNYTDC) 11-19 Custom Materials (Custom)

Great Lakes Manufacturing Technology Center (GLMTC) 11-53

Kintz Plastics, Inc. (Kintz) Center for Economic Growth (CEG) 11-1 23

Marplex, Inc. (Marplex)

Northwest Wisconsin Manufacturing Outreach Center (NWMOC) 11-137

XV
Sherwood Plastics, Inc. (Sherwood)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systenns Center (EISC)

Trident, Inc. (Trident) CONN/STEP

PRODUCT DEVELOPMENT

Century Aero Products International, Inc. (CAP)

California Manufacturing Technology Center (CMTC)

Haas-Jordan Co., Inc. (Haas-Jordan)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systems Center (EISC)

Kintz Plastics, Inc. (Kintz) Center for Economic Growth (CEG)

Shakespeare Electronics and Fiberglass (Shakespeare)

Southeast Manufacturing Technical Center (SMTC)

PRODUCT PERFORMANCE TESTING

Century Aero Products International, Inc. (CAP)

California Manufacturing Technology Center (CMTC)

Haas-Jordan Co., Inc. (Haas-Jordan)

Lake Erie Manufacturing Extension Partnership, a division

of the Edison Industrial Systems Center (EISC) RCF Seals & Couplings, Inc. (RCF)

Georgia Manufacturing Extension Alliance (GMEA)

QUALITY ASSURANCE

Custom Materials (Custom)

Great Lakes Manufacturing Technology Center (GLMTC)

Ithaca Peripherals, Inc. (IP)

Alliance for Manufacturing and Technology (AM&T)

Glendale Technologies Corporation (GTC)

Chicago Manufacturing Center (CMC)

Timberlyne Cabinet Company (Timberlyne) North Carolina Manufacturing Extension Project (NCMEP),

Center for Economics Research Walker Systems, Inc. (WSI)

The West Virginia Partnership for Industrial Modernization

(WVPIM)

xvi
SKILLS TRAINI NG

Braunstein, Inc. (Braunstein)

Industrial Technology Assistance Corporation (ITAC)

Marplex, Inc. (Marplex)

Northwest Wisconsin Manufacturing Outreach Center (NWMOC)

WORKFLOW ANALYSIS

Baron Industries Corporation (Baron)

Georgia Manufacturing Extension Alliance (GMEA)

Buerk Tool and Machine Co., Inc. (Buerk^ Western New York Technology Developnnent Center, Inc. (WNYTDC)

xvii

PROFILES

I

u

MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

Georgia Institute of Technology,

Georgia

Manufacturing

Extension Alliance

(GMEA)

Atlanta, Ga.

Baron Industries

Corporation,

Dalton, Ga.

Manufacturer of

glass range tops

Number of

employees:

50

Based on the case by Jan

Youtie, Economic Development Institute, Georgia Institute of

Technology, on behalf of GMEA.

Projects

Plant layout assistance to Baron Industries Corporation. GMEA provided approximately 105 hours

of assistance to Baron Industries Corporation, which included activities related to designing a new

plant layout and setting up demonstrations of manufacturing and business management software and

barcode technologies. GMEA made several additional recommendations to improve Baron's work

processes.

Selected outcomes:

Recommendations adopted by Baron resulted in savings of more than $800,000 in inventory, overtime

pay, and equipment and materials. The new GMEA-recommended layout prompted an inventory

decrease that produced a one-time savings of $750,000, and incorporated process improvements that

netted a 40-percent increase in direct labor productivity in several of Baron's product lines. The

addition of a new workstation saved the company $44,000 in overtime pay, with a further $100,000

savings expected over the course of a year. Skills learned by Baron management in a GMEA

documentation course helped reduce the company's internal scrap rate from 80 percent to 10 percent,

saving it $5,000 over a three-week period. Finally, Baron was able to use the computer-generated

layout to close an $8 million sale and to justify the addition of 16 new jobs.

Cost Savings from GMEA Related Activities

$4,800 from non-conforming $2,000 from GMEAglass, based on GMEA- recommended

($750,000) resulting from GMEA-generated layout

1-1
MANUFACTURING EXTENSION PARTNERSHIP

C C E S S STORY

Industrial Technology

Assistance

Corporation (ITAC)

New York, N.Y.

Braunstein, Inc., New York, N.Y.

Manufacturer of

fine gold jewelry

Number of

employees:

110

Based on the case by

Claire Brownstein, ITAC

Project(s):

Productivity improvement and skills training. In 1992-1993, ITAC assessed Braunstein's manufacturing operation and recommended a comprehensive productivity improvement project to improve worker efficiency, product quality, reduce costs, and formalize processes. ITAC identified a

consultant specializing in the jewelry business to be the lead assistance provider, and assisted the company to engage and manage the consultant. ITAC also helped the firm obtain a grant from the New York State Industrial Effectiveness program (lEP) to offset partially the project cost. In 1995-96,

ITAC developed and managed a 50-hour skills training program to improve and upgrade the skills of 15 new hires.

Selected outcomes:

Braunstein experienced significant manufacturing improvements within one year of completing the

productivity initiative. Individual employee productivity tripled. Cycle time was reduced 20 percent,

and reject rates decreased from 10 percent to 6 percent. Overall quality improved an estimated 15-20

percent, while increased efficiency reduced operating costs by 25-75 percent—depending on the

specific function. Greater use of capacity also resulted. For example, Braunstein does all of its stamping in house, as opposed to only 60 percent before the initiative. The ratio, in percent, of imported to manufactured products has also improved—from 65:35 to 50:50. Improved product

design and delivery has helped to increase Braunstein's customer base, and the company has hired 20-

25 new plant workers and retained almost 50 manufacturing jobs as a direct result of improved and

expanded operations.

Impacts of Manufacturing Improvements

Before improvements After improvements

Cycle time 5 weeks 4 weeks

Customer reject rate 1 0 percent 6 percent

in-house stamping 60 percent 1 00 percent

Percent ratio of imported

to manufactured products 65:35 50:50

1-2
MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

Western New York

Technology

Development

Center, Inc. (WNYTDC)

Amherst, N.Y.

Buerk Tool and

Machine Co., Inc. (Buerk),

Buffalo, N.Y.

Manufacturer of machine parts and

tools

Number of

employees:

14

Project(s):

Technical assistance project involving comprehensive plant layout and workflow analysis. TDC

helped Buerk implement several process and layout improvements. Optimization models

demonstrated alternative layout schemes that rendered more efficient workflows. Other

recommendations to improve Buerk's production area dealt with housekeeping procedures, tool and

materials storage, and better use of floor area. New work tracking software linked the shop floor and

offices.

Selected Outcomes:

Through TDC, Buerk gained a new capacity for change, learning that new practices are desirable,

possible, and profitable. Employees also profited by receiving a 15-percent bonus and a 5-percent

wage increase. Work-in-progress inventory declined, and better housekeeping procedures improved

workflow. Sales for the company increased by 20 percent to a record $1.4 million. Process flow improvements reduced significantly the physical distance materials move during the production

process, thus reducing cost and increasing delivery speed to customers. The new plant layout further

generated space-related savings totaling around $6,800.

Based on the

case by Sue Scherred Western New York TDC

and Douglas Welch, Nexus Associates

Project-Related Improvements and Economic Impacts

Increased sales (by 20 percent to $1 .4 million)

1 5 percent bonus and 5 percent wage increase for employees

Process flow improvements

30 percent reduction in production movement

More efficient use of space

1-3
Iowa Manufacturing

Technology Center

(MTC),

Ames, Iowa

Carver Pump

Company

(Carver),

Muscatine, Iowa

Manufacturer of

standard and custom pumps for commercial

and military markets

Number of

employees:

126

Based on the case by Jan Youtie Economic Development

Institute, Georgia Institute of Technology, on behalf of Iowa MTC

MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

Projects:

Technical assistance to complete ISO certification process. Iowa MTC engineers provided 250 hours

of assistance to help Carver become certified to the ISO-9001 standard and thereby increase sales to commercial and export markets. Project work towards this end included interpreting TSO

specifications, providing a gap analysis, arranging visits with other certified manufacturers, and

providing company training and a pre-assessment audit.

Selected outcomes:

Carver's sales composition changed dramatically following ISO certification. Seventy percent of

Carver's sales now come from commercial clients and 30 percent from defense-related customers, the

reverse of its historical pattern. Carver also expects export sales, now at 5 percent, to rise to 15

percent in the near future. These changes have enabled it to maintain sales stability in the face of a

40-percent decline in orders from key military customers. New business with a commercial client

Westinghouse Electric Corporation—gave the company $70,000 in new sales, a level expected to rise

to $300,000 or more. The company also received its first export business for nearly $200,000 worth

of orders for turbine pumps from an Italian manufacturer. Finally, through training. Carver staff gained new skills and strengthened communications throughout the company.

Benefits Resulting From ISO Certification

Benefit Before Assistance After ISO Certification

Training Virtually no formal training $20,000 investment in ISO-related training

Commercial sales 30 percent commercial

70 percent defense-related 70 percent commercial

30 percent defense-related

Export sales Virtually no export sales 5 percent export sales

1-4
MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

California Manufacturing

Technology Center

(CMTC)

Hawthorne, CA

Century Aero

Products

International,

Inc. (CAP),

Compton, CA

Manufacturer of

airplane luggage

containers

Project(s):

Engineering assistance with proposal to create new container for FAA solicitation. A field engineer

at CMTC helped CAP win an FAA solicitation to design a cost-effective, bomb-resistant container. He

selected manufacturing partners to work with CAP, and arranged for product and materials analyses

at a federal government lab. He also collected and analyzed past test results from similar CAP

products. Finally, the CMTC engineer collaborated with CAP in developing the proposal to the FAA

and acted as project manager as CAP developed prototypes of this new container.

Selected outcomes:

cap's winning proposal will enable it to sell $1.5 million worth of airline containers to the FAA. CAP

predicts total container sales of $20-$40 million in the next 5 years, with a possibility of reaching $50

million if the FAA requires retrofitting of planes. CAP's new bomb-resistant container will enhance air

safety and—because it is lightweight—will be easier for airlines to purchase and use.

Number of

employees:

50

Based on the case by Greg

Rosen, NIST MEP, on behalf of the California Manufacturing Technology

Center

Impacts of California MTC's Assistance

• Sales of $1.5 million to FAA.

Likelihood of $20-$40 million in sales over the next five years.

Future potential sales of up to $50 million.

Enhanced air safety.

1-5
MANUFACTURING EXTENSION PARTNERSHIP

C C E S S STORY

Southeast

Manufacturing

Technology Center

(SMTC)

Columbia, S.C.

Cheraw Yarn

Mills, Inc. (Cheraw),

Cheraw, S.C.

Manufacturer of

small thread and

sales yarn

Number of employees:

275

Project(s):

Assistance in attaining ISO-9002 certification. SMTC assisted Cheraw through a variety of projects

designed to help it become certified to the ISO-9002 standard. Projects included providing training to

supervisors and employees, assisting in documenting procedures, establishing best practices, and

conducting internal audits and improvement plans based on audit results. Cheraw completed all

phases of a five-part process designed to prepare it for ISO-9002 registration.

Selected outcomes:

Cheraw implemented the necessary improvements to become the first manufacturer of sales yarn in South Carolina to be ISO-certified. Improved operations company-wide have made an immediate

positive impact in a number of areas. Customer complaints are down 15 percent, reducing costs by

$10,000. A 25-percent decrease in nonconforming product has produced a savings of $30,000.

Cheraw is also considering expanding its product line and, with ISO certification, will attract a larger customer base. Finally, Cheraw has maintained its position as a leader in the sales yarn market,

differentiating itself against tough competition.

Based on the case by English Drews, SMTC Summary of Estimated Economic Impact

Labor/material decrease $10,000 Capital avoidance $30,000

Total Estimated Economic Impact: $40,000

Note: This represents an estimated economic impact as of March 1996. The full implications of Cheraw 's ISO-9002 registration have not been realized and will continue to be measured.

1-6
CONN/STEP. New

Britain, Conn.

Conservation

Alliance, Inc. (CAI),

Southbury,

Conn.

Manufacturer and

seller of exit signs

Number of

Employees: 4

Based on the case by Tab Wilkins, CONN/STEP

MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

Project(s):

Technical assistance to lower costs and increase sales. CAI was forced to deal with an increasingly

competitive market, including decreasing prices caused by competition and increasing consumer

emphasis on quality. CONN/STEP provided 51 hours of assistance to CAI. On CONN/STEP's

recommendation, CAI adopted a new manufacturing process based on plastic rather than metal components. Called injection molding, the process extended the life of the sign by incorporating

improved electronic circuitry. Two hundred hours of outside consulting expertise helped CAI

implement the process. Further efforts are underway to develop a retrofitting kit to permit easy conversion of old signs to CAEs new sign.

Selected Outcomes:

The use of CONN/STEP-recommended plastics and injection molding increased CAEs output fivefold—to 200 signs a day. It also cut the company's manufacturing costs in half, as injection molding

required fewer parts and assembly steps while offering improved durability and optical diffusion of the

display. Improvements in the electronic circuitry allowed CAI to offer customers a 10-year guarantee

for the life of its signs. These process and product changes increased CAEs market competitiveness.

The company doubled its sales in 1995, compared with 1994, thereby creating 12-15 new jobs related

to manufacturing and assembly operations.

Illustrations of results are available from the author by request.

1-7
MANUFACTURING EXTENSION PARTNERSHIP

C C E S S STORY

Great Lakes

Manufacturing

Technology Center

(GLMTC)

Cleveland, Ohio

Custom

Materials

(Custom),

Cleveland,

Ohio

Manufacturer of

electrical insulation products used mainly

by Fortune 500

companies

Number of

employees:

85

Project(s):

Technical Assistance (TA) to effect manufacturing process improvements. GLMTC assisted Custom

in bringing about manufacturing process improvements by locating and implementing the appropriate

technology and techniques. A total of 33 TA activities for Custom began with a complete operations assessment and related recommendations for change. GLMTC engineers worked with Custom to develop a new plant layout, quality assurance and business information systems, and waste reduction,

environmental, and business systems projects.

Selected Outcomes:

GLMTC recommendations implemented by Custom have greatly improved the company's

manufacturing performance. Improvements have resulted in reduced scrap rates, increased percentage

of on-time delivery, more efficient use of capacity, greater productivity, decreased lead time, reduced

inventory, and a quicker response to customer demands. These improvements have allowed the company to increase production, quality, and margin, and reduce costs and waste. Custom feels it has addressed its operational issues and now can better position itself strategically in the industry and in

the global marketplace.

Illustrations of results are available from the author by request.

Based on the case by Thomas Szabo, GLMTC

1-8
MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

The West Virginia

Partnership for

Industrial Modernization

(WVPIM)

West Virginia

Institute of

Technology,

Montgomery, W.V.

D.J. Manufacturing,

Inc. (DJMI),

Huntington,

W.Va.

Machine shop

manufacturer of

discrete parts

for underground coal mining industry

Number of

employees:

40

Project(s):

Two technical assistance projects identifying outside resource. As part of DJMI's move to diversify its

business offerings, WVPIM assisted DJMI in identifying an outside resource to help develop a drawing

of a prototype braking system for a large earthmover. As recommended, DJMI contacted the Robert

C. Byrd Institute for Advanced Flexible Manufacturing Systems (RCBI), which used an in-house coordinate measuring machine and a CAD package to successfully produce the drawing. WVPIM also

assisted DJMI in resolving problems it was having with a new CAD/CAM computer system. Again,

working with RCBI, WVPIM recommended appropriate computer hardware, software, and training to meet DJMI's needs.

Selected Outcomes:

Completion of its computer project, spearheaded by the efforts of WVPIM and RCBI, gave DJMI a real

competitive advantage. Using its CAM package to create the programs required to machine the part

drawing created in a CAD system, DJMI has significantly reduced the time it takes to put a new part

into production—from weeks to mere days. Success with its new shop program enabled DJMI to

justify the purchase of a new vertical milling machine, which provided even greater efficiencies in the

iterative design process. DJMI also experienced an 18.6 percent reduction in labor costs while

sustaining production levels after one year of the CAD/CAM improvements.

Illustrations of results are available from the author by request.

Based on the case by Lawrence Dixon, WVPIM

1-9
MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

Massachusetts

Manufacturing

Partnership (MMP)

at the Bay State

Skills Corporation,

Amherst, Mass.

Extrusion

Technology, Inc. (Extrusion),

Randolph, Mass.

Manufacturer of extruded aluminum

parts and assemblies

Number of employees:

60

Based on the case by Eric Heller, UMASS

Donahue Institute, on

behalf of the MMP.

Project(s):

Three Technical Assistance (TA) projects addressing communications, productivity, and marketing

issues. MMP offered Extrusion a broad understanding of these issues and access to an extensive network of public and private consulting resources. Specific projects sought to improve cross- department supervisor communication and production scheduling, reduce set-up times in the machining department, measure customer satisfaction, and identify new product development

opportunities. The latter two were accomplished through a customer-oriented market survey.

Selected Outcomes:

The TA projects initiated by MMP for Extrusion improved business performance in several areas. More sophisticated production scheduling techniques greatly reduced late shipping rates—from 17

percent to 5 percent. Extrusion's president and owner attributes $10,000 in direct savings to the

supervisor training project. As a result of the reduction in set-up time, productivity in the machining

department has increased between 100 and 200 percent depending on the component being run at the time of measurement. Bottom-line savings total $10,000 annually in set-up reductions and $20,000

per year attributable to increased productivity from feed rates and run speeds. The momentum created by this modernization project has prompted an additional investment of over $50,000 in new

equipment, which will give the company an even greater competitive advantage. Finally, the market

research survey presented the company with $200,000 in new product development opportunities, with

greater future benefits expected.

1-10
MANUFACTURING EXTENSION PARTNERSHIP

C C E S S STORY

Massachusetts

Manufacturing

Partnership (MMP)

at the Bay State

Skills Corporation,

Amherst, Mass.

Galileo

Corporation

(Galileo),

Sturbridge, Mass.

Manufacturer and

marketer of glass fiber and electro-optic

components,

assemblies, and systems

Number of

employees:

200

Based on the case by Steven Bills, UMASS

Donahue Institute, on behalf of the MMP.

Project(s):

Three Technical Assistance (TA) projects, and identification and management of consultant

resources. MMP provided Galileo with three different TA projects designed to improve its competitiveness by (1) enhancing micro-channel plate inspection through automation, (2) improving

productivity on a specific product line, and (3) rationalizing Galileo's vendor purchases. MMP also

identified and managed consultant resources to meet Galileo's particular needs.

Selected Outcomes:

As a result of MMP projects, Galileo has decreased costs and increased productivity and sales, while

competing in a global marketplace. Specifically, these projects have afforded Galileo a direct benefit

of $1,125,000 annually through increased taxable export sales of $625,000 and vendor-related cost

reductions of $500,000. They also provided an additional $200,000 in business to domestic vendors

and created 21 new jobs.

Total Benefits Derived from Improvements

$625,000

increased

taxable export

sales $500,000 vendorrelated cost reductions

/enaor- ; J ions J

1-11
MANUFACTUR NG EXTENSION PARTNERSHIP

TORY

Chicago

Manufacturing

Center (CMC)

Chicago, III.

Glendale

Technologies

Corporation

(GTC),

Lisle, III.

Assembles and sells low-cost computer

system

Number of

employees: 21

Based on the case by Natalie Davila, CMC

Project(s):

Assistance in increasing profitability and customer base. CMC assisted Glendale Technologies in the

areas of personnel, market expansion, and quality assurance. It also helped GTC attain minority

certification status and certification as a Small Business Administration disadvantaged contractor, thus

enabling the firm to negotiate as a sole source supplier for Federal procurements.

Selected outcomes:

Better busmess practices, achieved through CMC's assistance, have improved GTC's financial position

considerably. Increased sales, reduced debt, and lowered scrap and reject rates all have resulted. The

company has increased its profit margin significantly and taken advantage of its minority-owned

status to obtain new business—worth about half a million dollars. Several more contracts are

expected as GTC expands its customer base and moves into the export business. Through CMC's

"Finding Your Next Customer" program, GTC has drafted a business plan aimed at achieving $100

million in sales over the next 5 years.

Project-Related Benefits to Glendale Technologies

1992 1993 1994 1995 1996

Sales (millions) $4.72 $8.94 $5.90 $5.25 $7.00

Cost of Goods (millions) $4.31 $8.02 $5.22 $4.70 $5.77

Gross Margin (millions) $0.41 $0.92 $0.68 $0.55 $1.23

Scrap Rate 3.2 % 2.4 %

Reject Rate 2.0 % 1 .5 %

1-12
MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

Lake Erie Manufacturing

Extension

Partnership, a

division of the

Edison Industrial Systems Center

(EISC)

Toledo, OH

Haas-Jordan,

Inc., (Haas-Jordan),

Toledo, Ohio

Manufacturer of

umbrellas and

related products

Project(s):

Technical assistance in identifying and implementing improved business practices. EISC assisted Haas-Jordan with several improvement projects. First, it helped the company locate a facility to conduct wind-velocity testing of its umbrellas. Follow-on projects included installation of improved

silk-screening operations, development of a fabric canopy adhesive, and integration of benchmarking

tools. In addition, project efforts initiated prototype design and production of new umbrella components.

Selected outcomes:

Fiaas-Jordan has benefited from changed business practices and performance. The new silk-screening

machine, by accommodating larger logos, furnished the company a custom logo market niche worth

an estimated $250,000 in additional revenues. Also, only one worker now runs the silk screening

operation, which is 25 percent more efficient and yields a productivity improvement worth $8,000.

Other projected economic benefits include a $10,000 savings related to wind tunnel testing, $6,000 to adhesive development, and $1,200 to prototype development. The total realized annual cost savings is $45,200 or $3.56 for each dollar invested in EISC.

Number of employees: 55

Based on the case by Richard L. Hanson,

Lake Erie Manufacturing

Extension Partnership

Project-Related Realized Annual Cost Savings

Year Annual Cost Savings

1995 $10,000 wind-tunnel testing savings

1995 $8,000 productivity improvement in silk screening of large umbrella operation

1995 $20,000 incremental contribution of margin hoop lift frame system for large logos

1996 $6,000 projected economic impact of adhesive interface development

1996 $1 ,200 projected economic impact for prototype development of new umbrella parts

1996 $45,200 in realized annual cost savings

BOTTOM LINE: $3.56 return for each dollar invested

1-13
MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

Alliance for Manufacturing and

Technology (AM&T),

formerly University/

Industry Public

Partnership

for Economic

Growth (UnlPEG),

Binghamton, N.Y.

Project(s):

Technical assistance in the fortn of direct services and consultant management. AM&T helped

identify and subsequently manage a consultant hired to implement a new manufacturing operations

management information system (MIS) and related changes in the production process. These changes

included the addition of "fourth shift" information system software and a new floor organization.

Other AM&T services included development of a manufacturing strategy plan. This plan assessed the

business environment at IP and identified tools to help the company improve product quality and

manufacturing operations. The company also adopted a system to measure customer satisfaction.

Ithaca

Peripherals, Inc.

(IP), Ithaca, N.Y.

Manufacturer of pointof-sale (POS) printers for printing receipts

and t/c/cets

Selected Outcomes:

Technical assistance helped transition the company from a "mom and pop" shop, where no one was

operating on the same information, to a company with integrated operations. Major project

components in the manufacturing plan resulted in better performance and reduced unit costs and/or

increased unit revenues. New quality control procedures cut the number of warranty returns—from

50 percent for "Model A" in 1993 to 5 percent in 1995. Estimated savings from an increased firstpass yield rate—from 92 percent in 1994 to 96 percent in 1995—equaled approximately $12,000.

Estimated total savings from these projects is expected to be around $30,000 the first year.

Number of

employees:

85

Based on the case by Douglas Welch, Nexus

Associates, on behalf of the AMST.

Warranty Return Rate

1993 1994 1995

Model A 50 % 40 % 5%

Model B 2.75 % 2.65 % 1 .50 %

Source: IP Data

1-14
Industrial Technology

Assistance

Corporation (ITAC)

New York, N.Y.

KD dids, Inc., (KDdids),

New York, N.Y.

Manufacturer of dancewear

Number of employees:

40

Based on the case by Claire Brownstein, ITAC

Project(s): Assessment and technical and business assistance to help grow a small company's business. Working

with a local economic development corporation in 1992, ITAC helped the company secure a $100,000

loan to purchase new equipment to meet increasing demand. In 1994, ITAC then recommended a comprehensive productivity improvement project to help KD dids accommodate its growth, assess its requirements, and formalize and modernize its operations. In addition, ITAC assisted the company in obtaining a grant from the New York State Industrial Effectiveness Program (lEP) to offset partially the

cost of the productivity project.

Selected Outcomes:

The intial bank loan doubled KD dids' production capacity enabling the company to meet the market

demand for its popular products. Once KD dids had a credit history, it was able to finance privately

six more machines. The productivity improvement project resulted in expanded and cost-effective

operations. Order turn-around time decreased from 14 weeks in 1993 to 3-4 weeks today and shop

layout changes incorporated a new cut-and-sew operation. KD dids doubled its sales, from $400,000

in 1991 to nearly $900,000 in 1995, and projects 1996 sales of $1.5 million. With increased sales, the company hired 26 aditional employees from its South Bronx neighborhood and generated additional

tax revenues.

KD dids Annual Sales

1-15
MANUFACTURING EXTENSION PARTNERSHIP

C C E S S STORY

Center for Economic

Growth (CEG)

Albany, N.Y.

Kintz Plastics,

Inc. (Kintz),

Howes Cave, N.Y.

Thermoforming

manufacturer of large

plastic components

Number of

employees:

135

Based on the case by

Douglas Welch, Nexus

Associates and the CBG

Project(s):

Assistance in installing a new information system to improve company operations. Through CEG,

Kintz received a floor plan for forming a workshop extension, along with reduced-fee ISO-9000

certification—the first such thermo manufacturer to receive ISO certification in the U.S. The company

also received assistance in developing new automotive products being marketed in Japan, and in adding a job-tracking capability for purchasing, inventory control, and job ticketing and routing.

Selected Outcomes:

The new computer systems helped Kintz to substantially increase its productivity and output, with

sales rising to $7.5 million in 1995, from $2 million in 1990. A system-related increase in capacity

helped "grow" the company from 95 employees in 1992 to 110 in 1994. For the same period,

manufacturing lead time was reduced from 70 to 56 days. Product scrap rate was reduced from 6

percent to 4.2 percent, and customer rejects from 2.3 percent to 1.2 percent. The new layout plan

improved workflow and overall plant efficiency, obviating the need to relocate work in progress.

Finally, Kintz was able to bid on and win a contract for two new products through CEG-obtained

access to digitizing equipment. The contract resulted in $50,000-$100,000 in export sales for Kintz.

Overall, Kintz estimates that its investments of approximately $100,000 in MEP-affiliated

improvements have produced $2 million in benefits to the company.

Impacts of Production Improvements

Before 1992 After 1994

Number of employees 95 135

Manufacturing time 70 days 56 days

Product scrap rate 6% 4.2 %

Customer rejects 2.3 % 1 .2 %

1-16
u

MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

Long Island Forum

for Technology

(LIFT) Long Island, N.Y.

Luitpold

Pharmaceuticals,

Inc. (Luitpold),

Shirley, N.Y.

Manufacturer arid packer of generic

injectable drugs

Number of

employees:

300

Based on the case by

Douglas Welch, Nexus

Associates, on behalf of

LIFT

Project(s):

Assistance in improving Luitpold's efficiencies in the production line. The primary assistance LIFT managed was a grant from the New York State Industrial Effectiveness Program (lEP), a mentoring

program that provides financial asssistance to firms for modernization efforts. Services included help

in calculating costs and in selecting consultants. Rather than make dramatic changes to the manufacturing process, the consultants reorganized product line information into a more manageable

form. They provided tools to help the company monitor the work flow and to associate processes with

costs. Workplace changes included new material flow and production tracking systems, improved

production line efficiency, and provision of production data to those responsible for controlling the

process.

Selected Outcomes:

Luitpold's new system resulted in a reduced unit cost of production, reduced labor cost through

overtime reduction, and reduced scrap rate.

Benefits Derived from Project-Related Investment

$708,000 IN BENEFITS

Reduced unit cost of production

Increased employee productivity

• Reduced labor cost

• Reduced material purchases

• Reduced scrap rate

$256,000 INITIAL INVESTMENT

1-17
MANUFACTURING EXTENSION PARTNERSHIP

C C E S S STORY

Northwest

Wisconsin

Manufacturing

Outreach Center,

(NWMOC)

Menomonie, Wise.

Marplex, Inc. (Marplex),

Rhinelander,

Wis.

Manufacturer of wood

crating and wood

pallets

Number of

employees: 125

Based on the case by Orville Nelson, NWMOC

Project(s):

Technical assistance projects to improve plant layout, materials handling, and production systems.

NWMOC provided several technical assistance projects to Marplex. It helped the company redesign

the infeed system for the plant's sawmill, reorganize production processes into a cellular layout, and

develop a preliminary storm-water pollution plan. Marplex employees also participated in an NWMOC value-added manufacturing seminar and learned systematic problem-solving techniques.

Selected outcomes:

NWMOC projects reduced work in process and materials handling activities, while increasing output

per person hour. Marplex plant managers also learned to view manufacturing systems with an eye to

value added process. The NWMOC project generated $120,000 in annual savings for the company.

The cellular layout project in Plant 1 improved production processes to the tune of $7,000 per month—savings generated by less down time, overtime work, and work in process. The new infeed system for Plant 3 eliminated the need for a full-time person, reduced down time for the sawmill

system by 80 percent, and reduced maintenance time by 12 hours—a savings of at least $3,000 a month. The storm-water plan has resulted in a more effective dust collection system and less wood

and petroleum waste on plant grounds. Finally, increased capabilities developed at Marplex will help

preserve 125 jobs at the company.

NWMOC-Generated Improvements to Marplex

Increased output per person hour. Improved production processes worth

Reduced downtime for sawmill—by 80 $7,000/month.

percent. Eye to value-added processes. Reduced work in process and material Preservation of 1 25 jobs.

handling. Reduced maintenance requirement worth

• $120,000 annual savings. $3,000/month.

1-18
MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

Georgia Institute of

Technology, Georgia

Manufacturing

Extension Alliance

(GMEA)

Atlanta, Ga.

RCF Seals &

Couplings, Inc. (RCF),

Vidalia, Ga.

Manufacturer of seals and couplings for the aerospace industry

Number of employees:

32

Based on the case by Jan

Youtie, Economic Development Institute, Georgia Institute of

Technology, on behalf of GMEA

Project(s):

Technical assistance in arranging required product performance testing. GMEA provided 20 hours

of assistance arranging for the timely testing of RCF's new seal, which it was trying to sell to Learjet,

Inc. Through the Direct Assistance Programs at the Oak Ridge National Laboratory, GMEA located and arranged for 160 hours of technical assistance for RCF at Oak Ridge's High Temperature

Materials Laboratory, which performed the requisite high-temperature portion of the testing.

Simultaneously, the GMEA office manager contacted the Warner Robins Air Logistics Center to perform the cold-temperature test.

Selected outcomes:

RCF's seal was the first of its kind to successfully pass both the high- and cold-temperature tests. As a

result, RCF closed a deal worth $2 million and discovered the benefits of working directly with

Federal labs on non-proprietary research at no cost. Now, the company is planning other industry

applications for the seal and has added 10 new employees to create a new "middle management"

layer. RCF credits its product with the potential to generate another $50 million in sales, and believes export sales of the seal could eventually equal domestic sales. RCF is exploring the possibility of

licensing the testing apparatus from Oak Ridge, which would give the company in-house testing

capability.

Results of GMEA Assistance

Before GMEA Assistance After GMEA Assistance

• No proof of high-temperature tolerance • Testing shows seals can withstand

required temperature ranges

• No in-house testing capabilities • Established ongoing relationship with Federal laboratory

• $1 .2 million in sales • Additional $2 million booked over 2 years

• 95 percent of sales to domestic aerospace

customers

• Potential for more export sales and sales

in petrochemical industry

• 22 employees (top managers performed

supervisory functions)

• 10 new jobs, with "middle management"

layer added

1-19
ANUFACTURING EXTENSION PARTNERSHIP

TORY

Southeast

Manufacturing

Technical Center

(SMTC)

Columbia, S.C.

Shakespeare

Electronics and

Fiberglass

(Shakespeare),

Newberry, S.C.

Manufacturer of fish and tackle products

Number of

employees:

355

Based on the case by English Drews, SMTC

Project(s):

Technical assistance (TA) in carrying out a new product development project using new approaches

and technologies. Shakespeare wanted to extend the product life cycle of its current Ugly Stick^ by

developing a new-generation fishing rod. SMTC at the University of South Carolina (USC) introduced

the application of a computer-simulation tool to predict the sensitivity, weight, and functionality of the new design. In a second phase, SMTC designed and built prototype rods to verify the computer

simulation. It later developed alternative processes for optimizing product designs for several other rod types, with the goal of introducing the products at the July 1995 American Sportfishing

Association (ASA) show.

Selected outcomes:

Shakespeare's new Ugly Stick^ Lite Series was enthusiastically received at the ASA conference and by

consumers. Within 5 months after it was introduced, the rod achieved 90 percent of forecasted annual

sales. With an estimated product life of 10 years, the new rod has total projected sales of $7,700,000.

It is also stronger, weighs less, and uses less product material than the old version. In addition, use of computer-simulation tools significantly reduced time-to-market and new product development

expense. Finally, a successful new product introduction has had a direct impact on the job security of 20 percent of Shakespeare's work force, and has helped to solidify the company's reputation and

market position.

Summary of Estimated Economic Impact

Capital Investment $150,000

Sales Increased $7,700,000

(over the life of the product)

1-20
MANUFACTURING EXTENSION PARTNERSHIP

CC ESS STORY

Lake Erie Manufacturing

Extension

Partnersiiip, a division of tlie Edison Industrial Systems Center

(EISC)

Toledo, Ohio

Project(s):

Assistance in growing a small business through value-added operations and product-line diversity.

EISC assisted Sherwood with an expansion plan, which doubled its facihty while providing space for

additional molding equipment. The plan also consolidated off-site storage and incorporated just-intime manufacturing concepts. A new manufacturing layout completely rearranged the factory to

incorporate more cost-effective and efficient processes. Other projects that complemented Sherwood's

growth involved use of benchmarking tools, development of information systems, and suggestions for waste reduction.

Sherwood

Plastics, Inc., (Sherwood),

Fostoria, Ohio

Rotational plastics molder

Number of employees:

86

Selected outcomes:

Construction of a new facility for Sherwood has effected many of EISC's recommended business

practices. As a result of these changes, Sherwood is saving over $45,000 a year in raw material cost

alone. Material handling costs have also been reduced, and quality has improved. Consolidating all

operations in the new facility has mitigated the cost of offsite warehouses and additional material

handling. The use of workcell concepts has greatly improved work force productivity. Sales per employee have risen from approximately $50,000 to $70,000, giving the company an annual cost

benefit of $540,000 in employee productivity. Sales have increased from $3.5 million in 1993 to $6

milhon in 1995, producing $625,000 in incremental income. The total realized annual benefit is approximately $1.2 million.

Based on the case by Richard L. Hanson,

Lake Erie Manufacturing

Extension Partnership Annual Cost Benefits from

EISC-Assisted Projects

Material Cost Savings $45,000

Employee Productivity $540,000

Ratio of Sherwood Benefit to EISC Funding

EISC Funding

$1

Incremental Income

$625,000

Sherwood Benefit $63.51

1-21
North Carolina

Manufacturing

Extension Project

(NCMEP),

Center for Economics Research,

Triangle Park, N.C.

Timberlyne

Cabinet

Company

(Timberlyne),

Angier, N.C.

Manufacturer of

frameless wooden

cabinets

Number of

employees: 32

Based on the case by Sheila Martin, Research Technology Institute, on

behalf of NCMEP

MANUFACTURING EXTENSION PARTNERSHIP

CCESS STORY

Project(s):

Technical assistance (TA) in four areas of company operations. NCMEP assisted Timberlyne with

four different technical performance issues, researching problems and consulting outside experts for proposed solutions. Specifically, NCMEP recommended solutions to Timberlyne's problems with

inconsistent finish quality on products processed in the spray paint booth and inferior performance of

ultraviolet curable coatings. Unacceptable properties and cost of medium-density fiberboard supplies were also addressed, along with environmental permitting issues related to airbag return air. Timberlyne initiated a number of activities to correct these problems and earn the company positive

results.

Selected Outcomes:

NCMEP's recommendations regarding the spray paint booth allowed Timberlyne to paint without

swirling, dust, and backspray, which doubled throughput—from 30 doors per hour to approximately

62.5 per hour. This production increase saved the company $1,157 per 1000 doors in labor costs and

reduced materials costs as well. A new ultraviolet curing process, made possible by MEPrecommended suppliers, resulted in an annual materials savings of $177,200, labor savings of $56,000, and belt savings of $22,000. Additionally, the company reduced its customer reject rates and increased on-time delivery. A recommendation that Timberlyne continue to work with Georgia

Pacific to discover a supplier for properly performing medium-density fiberboard saved the company

$101,120. Finally, a recommendation to apply for a special federally enforceable, flexible air permit

effected a savings of $4,750. In total, annual savings were $443,120 for all outcomes. Timberlyne

also eliminated 228,500 pounds of VOC emissions per year.

1-22
MANUFACTURING EXTENSION PARTNERSH

O R Y

CONN/STEP, New

Britain, Conn.

Trident, Inc., (Trident),

Brookfield,

Conn.

Manufacturer of ink and ink jet printer

head systems

Number of

employees:

no

Based on the case by

Tab Wilkins , CONN/STEP

Project(s):

Technical assistance (TA) in locating outside consultants to improve production and accommodate

growth. CONN/STEP helped Trident with two improvements central to its successful product

development and continued growth: plant layout to accommodate expanded ink production and the

introduction of work cells to improve workflow on the printer head line. Trident and its employees

received TA in locating the external expertise required to develop the new layout and to set up and

operate the new work cells. CONN/STEP is also working with the company on another project to automate parts of the ink production line.

Selected Outcomes:

Changes made by Trident resulted in a new workflow, improved throughput, and reduced inventory.

The improved ink production layout allowed Trident to reduce its work in progress from $1.6 million

to $800,000 within 2 months. Also, the cycle time for the ink jet head printer calibration decreased to one day from four weeks, eliminating the need for high levels of related inventory. Greater

productivity and reduced costs will let the company continue to be a strong force in the marketplace.

Project-Related Production Improvements and Impacts

Increased production 25-35% without increasing direct labor cost. Reduced ink production work in progress from $1 .6 million to $800,000

in two months.

Doubled throughput of Inkjet printer head line and increased responsive- ness to quality issues.

1-23
u

UFACTURING EXTENSION PARTNERSHIP

CESS STORY

The West Virginia

Partnersiiip for

Industrial Modernization

(WVPIM)

Montgomery, W.V.

Walker Systems,

Inc. (WSI),

Parkersburg,

W.Va.

Manufacturer of

electrical and

communications

distribution systems

Number of employees:

300

Based on the case by Lawrence Dixon, WVPIM

Project(s):

Assistance in evaluating planfs quality management system and manufacturing capability. WVPIM

performed quality and production process assessments for WSI, which revealed inefficiencies in the company's use of a traditional batch-type manufacturing process. To remedy this problem, WSI

undertook a comprehensive "flow-thru" manufacturing project, implementing several recommendations for process changes. These included incorporating just-in-time philosophies and

focused factory techniques, implementing a pull-production system to reduce inventories, increasing

the number of work cells, and installing a real-time computerized job tracking and scheduling system.

Selected outcomes:

Following completion of its "flow-thru" manufacturing project, WSI realized significant monetary

benefits from shortened production lead times, improved labor use, and reduced manual handling,

inventory costs, and floor space requirements. WVPIM assistance netted $2,670,000 worth of

financial benefits to WSI. Operational improvement by category shows $2,000,000 in overall

inventory reduction, $400,000 in sales, and $270,000 in overall productivity. The company also has

factored faster cycle times and improved work flow into the floor space design of a new facility.

1-24
CASE STUDIES

Case Study

BARON INDUSTRIES CORPORATION

Dalton, Georgia

GEORGIA MANUFACTURING EXTENSION

ALUANCE

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Jan Youtie

Economic Development Institute

Georgia Institute of Technology

Atlanta, Ga.

11-1

S E STUDY

Baron Industries Corporation

Baron Industries Corporation (Baron) assembles

glass tops for premium ovens. The family-run

business is headquartered in Dalton, Georgia,

which is 90 miles north of Atlanta. Baron employs

approximately 150 workers roughly divided among its three facilities in Dalton; Findlay, Ohio;

and Louisville, Kentucky.

GMEA Provides New Plant Layout

Baron's 22,000-square-foot leased facility was too

small for the volume of work it had and for its

material and inventory storage needs. The

company purchased a 47,000-square-foot building

a few miles north of its leased Dalton facility in

the summer of 1995. This purchase provided

31,000 square feet of operating space for Baron,

as it leased part of the facility to another company.

After attending one of GMEA's ISO-9000

documentation courses and learning about

GMEA's other service offerings. Baron's then plant

manager contacted GMEA's Dalton regional office manager to obtain assistance with the design for

the new building. GMEA staff, which included a Georgia Tech co-op student, reviewed Baron's paper-based plans and process analysis and took measurements at the old and new facilities. Within

a week, GMEA staff provided Baron with three

alternative computer-generated layouts. Baron's CEO and plant manager worked closely with the co-op student over the next 2 months to modify

the layout based on the requirements of potential

future customer assembly contracts.

GMEA staff also offered several process improvement recommendations. These

improvements mostly involved the cleaning and

waste removal functions. Among the recommendations was to purchase a screw-type

air compressor rather than the cylinder-type

currently used.

Baron was simultaneously considering upgrading

its manufacturing to include software for barcode technology and business planning and

control functions, but management was not sure whether such software was appropriate for its

small firm. The GMEA regional office manager

forwarded the request to GMEA's Center for Manufacturing Information Technology (CMIT),

a GMEA center jointly sponsored by Georgia

Power Company and Georgia Tech. CMIT

demonstrated several software systems to

Baron's general manager. Although Baron

ultimately decided to use a product not demonstrated at CMIT, the CMIT

demonstration showed management "the value

of the systems."'

GMEA provided approximately 90 hours of

layout-related assistance (mostly student time),

and another 15 hours for the software demonstration. Baron staff committed

approximately 90 days to the project. Table 1 summarizes the assistance provided by GMEA.

11-3
Table 1

Summary of Assistance and Impact

COMPANY INFORMATION • Baron Industry Corporation assembles glass range tops;

50 employees at headquarters facility in Dalton, Georgia

NEED • Plant layout for new facility; ISO-9000 documentation,

auditor instruction GMEA RECUMMcNDATION • Developed plant layout; recommended software, equipment,

operational changes; provided documentation instruction

INTERMEDIATE IMPACTS • Acquisition of quality management skills

• 40% increase in direct labor productivity

• ^1 ^0 nnn r;^nitpil in\/PQtmpnt in thp f;^pilit\/

• $86,000 business management software system investment

FINANCIAL BENEFITS AND

JOB IMPACTS

• $8 million new sales (plant layout used as sales tool)

• $100,000 operating savings

• $750,000 inventory savings

• 16 new jobs

11-4
Baron Moves, Improves Productivity

Baron moved into its new facility in October. Its then plant manager reported that, "[The GMEA]

service allowed Baron Industries Corporation to move into a new facility 2 months sooner than

anticipated." Careful planning allowed for a complex move to be completed in two days with

minimum effect on production output, he

continued. "We operated at 95 percent efficiency

the first day after the move."-

Process improvements incorporated into the layout

prompted a 40-percent increase in direct labor

productivity for Baron's three highest-volume

product lines. Direct labor costs decreased from

nearly $12 per unit before the move to $7 per unit

after the move for these product lines.

The layout also stimulated significant inventory

savings. Because the new design allotted less space

for inventory, Baron management had to sort through its inventory to determine which items to keep and which to return to suppliers. A

substantial portion of slow-moving inventory was

sent back to suppliers, resulting in a one-time

savings of $750,000 related to inventory, carrying

costs, and applied interest. Baron has since hired a corporate director of materials to help with

inventory control.

In an interview, the then plant manager referred to

a prevailing mindset that the company needed only

six workstations, when, in fact, workers had been

putting in significant amounts of overtime at the

old facility, partly because of this capacity

limitation.** GMEA's plant layout allowed for two

additional workstations. Baron added one new

workstation upon moving into the new facility,

saving itself $44,000 in overtime pay the first month. Baron expects to save about $100,000 in overtime pay over the course of a year.

Baron's capital investment in the new facility

totaled over $100,000. This investment includes a new air compressor for $2,000 less than the one Baron had been considering. Further, the company

anticipates a one-third reduction in energy costs to operate the new compressor compared to the one

they were considering. The company also decided

to make an $86,000 investment in business planning and control software.

Attending GMEA's ISO-9000 documentation

course gave the Baron manager new skills for reviewing his company's procedures and work

instructions, and helped him to configure work

processes more logically. The inspection function was moved to the beginning of the process, to allow inspection of all incoming glass. As a result,

Baron's internal scrap rate was reduced from 80

percent to 10 percent, which yielded nearly $5,000

in savings over a three-week period. Realizing the

great benefits of GMEAs instruction. Baron has contracted with an ISO-9000 registrar. Table 2 summarizes these benefits.

Plant Layout Helps Close Sale, Create New

Jobs

Baron asked GMEA staff to produce several copies of the computer-generated plant layout. These

11-5
copies were incorporated into sales presentations

to GE/Roper, one of Baron's biggest customers. GE/Roper was concerned about having a separate

space in the plant for a major subassembly. Baron

used the computer-generated layout to show where

the space was available—information that helped Baron close an $8 million sale.^ The plant layout justified the addition of 16 new

jobs including both hourly and management

positions.

Ten new hourly workers were hired to operate the new workstation. Additionally, sales growth has permitted Baron to add a middle management

layer; therefore, six salaried positions have been or

will be added this year, including a quality manager, a materials manager, two accounting

staff members, a materials control supervisor, and

an office manager/human resource specialist. Table

3 summarizes these sales and job impacts.

Table 2

Benefits In Manufacturing Performance From

GMEA Assistance

BARON NEED

GMEA

RECOMMENDATION

BARON

ACTION IMPACT

New plant layout Provided

CUllipUtci yfcJIIfcJIdLcU layout

Implemented new

piallL IdyUUl, reduced inventory

• $150,000 capital investment

111 IdOIMiy

• $750,000 one-time

• inventory savings

• 40% increase in direct labor productivity

Capacity limitation with 6 workstations Add 2 more

workstations Added 1 workstation

(other stations

in planning)

• $44,000 savings in November from eliminating overtime pay

• $2,000 capital expenditure

for workstation

Purchase of new

air compressor

Screw-type compressor

Purchased compressor

• $2,000 savings over what

would have been

purchased

• Anticipate one-third reduction in energy costs

(approx. $2,200)

High scrap rate Documentation of procedures, work

instructions, policies

Moved inspection

point to beginning

of process

• $4,800 savings from non- conforming glass over 3-week period

Inventory and

accounting control

Barcoding and

business management systems

Purchased

software

• $86,000 investment

Anticipate return on

investment within 1 year

li-6
Table 3

Sales and Job Impacts From GMEA Assistance

GMEA RECOMMENDATION

• New plant layout with separate

• Used computer-generated

BARON ACTION

subassembly area

layout to close sale

SALES/JOB IMPACTS

• Implemented plant layout

• $8 million sale contracted

• 6 new salaried jobs

Add 2 more workstations Added 1 new workstation 10 new hourly jobs

Role of GMEA and Market Conditions

Although Baron had already developed a plan

for laying out the new facility, assistance from

GMEA played a significant role in the final

design. Management valued the give-and-take

with GMEA staff during the months prior to

the move, as well as the industrial engineering

expertise, which, according to Baron's

president, "you can't get from an architectural

firm."* Baron's CEO said, "I didn't believe we

could get it all in there. But they laid it out, they were right.

Baron's sales increase also benefitted from

favorable external market conditions as the

Table 4

Household Cooking Equipment Industry Value Of Shipments:

1 987 vs. 1 994 (Values In Millions Of Dollars)

VALUE OF SHIPMENTS 1987 1994

Current dollars 3,396 3,339

Constant (1987) dollars 3,396 3,270

Source: U.S. Department of Commerce, Bureau of the Census U.S. Industrial Outlook, 1 994, pp. 36-9.

market share of glass-top ovens in the United

States rose from 3 percent to 20 percent over

the past five years. ^ Furthermore, pressures to maintain cost competitiveness in a highvolume, price-sensitive, mature industry (see Table 4) have encouraged outsourcing of assembly functions. Nevertheless, competitive

practices of other firms operating in Baron's

niche make the company's manufacturing

processes important to acquiring new business. When asked about his own role in the outcomes, one Baron manager said that he would "attribute most of the impacts to GMEA's assistance."'

I

11-7
CHRONOLOGY OF SERVICES

March/Apnl 1995

April/May 1995

June/July 1995

July 6, 1995

July 7, 1995

July 17, 1995

July 1995

July 31, 1995

August 3, 1995

August 1995

August 16-17, 1995

August 24, 1995

First week in September 1995

First half of September 1995

September 13, 1995

October 20-21, 1995

November 1995

November/

December 1995

January 1996

End of January 1996

Baron attended ISO-9000 course on documentation. Baron negotiated for new document. Baron closed on new building.

Initial meeting between GMEA and Baron. GMEA returned to existing leased

facility to gather information for plant layout.

GMEA staff visited new building and took measurements. GMEA provided Baron with three alternative preliminary CAD drawings; Baron made some changes.

GMEA's energy specialists made recommendations about air compressor

suppliers.

GMEA field engineer met with Baron to provide assistance in finding

accounting, quoting, and shop floor software. GMEA field engineer talked to GMEA Center for Manufacturing Information

Technology (CMIT) and called vendors to get information about software.

Further changes were made to the layout.

CMIT engineer set up demonstration of barcode technology and business management software for Baron. Field engineer scheduled visit with Baron. Baron Industries Corporation attended CMIT demonstration of manufacturing software. GMEA co-op student met with president at new facility. They conducted a

physical marking of facility for the final layout.

Final layout (excluding office space) completed.

Baron attended ISO-9000 user group meeting coordinated by the GMEA

Regional Office at Dalton College. Baron moved into new facility. Reduced overtime yielded savings of $44,000. Baron made sales presentation for new subassembly to GE/Roper.

Baron installed business management software; moved glass inspection point

to front of process; conducted direct labor productivity study.

GMEA provided final plant layout.

11-8
ENDNOTES

1. Interview with Baron Industries quality manager, January 22, 1996.

2. "Customer Evaluation of Services," mail questionnaire received from Baron Industries,

November 10, 1995.

3. Interview with Baron Industries CEO, January 18, 1996.

3. Interview with Baron Industries CEO, January 18, 1996.

3. Interview with Baron Industries CEO, January 18, 1996.

6. Interview with Baron Industries president, January 18, 1996.

7. Interview with Baron Industries CEO, January 18, 1996.

3. Interview with Baron Industries CEO, January 18, 1996.

9. Interview with Baron Industries president, January 22, 1996.

11-9

Case Study

BRAUNSTEIN, INC.

New York, New York

INDUSTRIAL TECHNOLOGY ASSISTANCE

CORPORATION

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Claire Brownstein

Industrial Technology Assistance Corporation

New York, N.Y.

11-11

T U D Y

Braunstein, Inc.

Braunstein, Inc. was established in 1947 as a manufacturer of fine gold jewelry. The firm is co- owned by Jack Granofsky, President, and Joel L.

Catania, Treasurer. In 1992, the company

employed 80 workers for both importing and

manufacturing operations. Today, the company

employs 110 workers. The increase is due

primarily to the expansion of manufacturing

operations.

In 1992, Braunstein occupied one floor

approximately 10,000 square feet—of a mid-town

Manhattan building in New York City. In 1995,

the firm doubled its operating space by taking over another floor in the building. Four years ago, 65

percent of business was from importing and 35

percent from manufacturing. Today, Braunstein

manufacture 50 percent of the fine gold jewelry it

sells. Its products are sold to major department

stores throughout the country.

The jewelry industry is highly competitive and

price sensitive. The price of gold is determined by

the international commodity exchange, and selling

prices are dictated by market competition.

Therefore, profit margins are determined by labor and operational costs. In effect, this means the

only real variables for a New York City jewelry

manufacturer are productivity, quality, and style.

By the early 1990's, the U.S. jewelry market was

being flooded by less expensive imports.

According to Mr. Granofsky, Braunstein often

could buy goods for less than it cost to manufacture them. It was then that the management team at Braunstein realized that urgent action was needed to keep its factory ope

for business.

A particularly persuasive advocate for change w£

Salik Khan, a dedicated, long-term employee and

the Vice President of Manufacturing. It was Mr. Khan who convinced the rest of the management

team that investing in company-wide changes

would enable the firm to regain its competitive

advantage. At the same time, he also recognized

the importance of eliciting buy-in from the workers on the factory floor. He proved to the

firm's employees that, ultimately, the changes

being considered would benefit them. It was the open and mutually respectful working relationship

within the company that created an environment

conducive to change.

Once Braunstein recognized the need to change, it turned to ITAC for guidance and technical

expertise.

Technical Assistance

Braunstein had learned of ITAC's assistance to New York City manufacturers from a friendly

contractor and decided to seek help. After making

an initial site visit, a field engineer from ITAC

recommended that Braunstein undergo a

productivity assessment of its entire manufacturing

operations and focus on improving productivity

and efficiency. ITAC also worked with Braunstein

11-13
to facilitate its participation in the New York State

Industrial Effectiveness Program (lEP), which

partially funded the productivity initiative. This

program is supported by the New York State Department of Economic Development (now

called Empire State Development).

At ITAC's recommendation, the company retained an independent jewelry consultant, H.I.A. &

Associates. The consulting firm conducted a comprehensive productivity assessment and

devised a workable plan for remedial action.

Furthermore, in 1995, it became clear to

Braunstein that some of the new hires needed to

quickly improve, diversify, and upgrade their

skills. The employees needed to be cross-trained to meet more flexible workflow demands and to

avoid possible seasonal layoffs. Braunstein once

again turned to ITAC to set up an affordable skills

training program. The ITAC Project Specialist in Human Resource Training developed and

managed a 50-hour skills training project for 15

Braunstein employees. An outside, part-time

trainer from the Fashion Institute of Technology in New York City was brought in to conduct the

training sessions. Areas of training included

jewelry, polishing, and soldering skills.

Changes in Practice

The productivity initiative began in 1993 and

focused on improving worker efficiency and

reducing costs. These were Braunstein's most

crucial problems according to the assessments conducted by ITAC and H.I.A. & Associates. The

management team of Braunstein agreed, and

productivity improvements began. The following

changes in practice occurred:

The standardization of all operational

procedures. Prior to the productivity

improvements, standards for each

manufacturing process were not specified.

Standards were created for each operation,

and all workers were required to follow the new procedures.

The establishment of an improved employee

reporting and remediation system. Before

the improvements, the company did not have a way to monitor employees and assist them in improving when necessary.

The implementation of a statistical process

quality control system (SPQC). Consistent

quality had been a problem for Braunstein. Changes were specifically designed to

address all quality issues.

The creation of a performance-based

incentive program. This program

encouraged greater worker efficiency and

improved product quality.

The hiring of an in-house, bilingual

industrial engineer. The work force in New

York City is culturally diverse. A bilingual,

in-house engineer was brought in to ensure

clear and continuous communication.

The installation of a management training program. A management training program was conducted to assist in the integration of new procedures and to increase the knowledge base of supervisors and

managers.

11-14
• The creation of an affordable skills training program.

Outcomes

Manufacturing Performance Improvement. The

productivity initiative was extremely effective and was marked by significant manufacturing

performance improvements within one year of completion. Productivity per employee tripled

after the improvements were implemented. Cycle

time decreased from 5 weeks to 4 weeks. Reject

rates decreased from 1 0 percent to 6 percent. Overall quality improved an estimated 15—20

percent. The company also is reporting a 15—20

percent productivity improvement for participants

in the 1995—1996 training program primarily

involving newly hired employees.

Further, Braunstein's capacity utilization has improved. For example, Braunstein was only

stamping 60 percent of the products produced in house before the initiative. Since the project's

completion, 100 percent of stamping is done

within the firm. Even more notable is the change

in the company ratio of imported to manufactured

products. In 1992, Braunstein imported 65 percent

of its products and manufactured only

35 percent. Today, the firm manufacture 50

percent of the products it sells. These

improvements are directly attributable to the

productivity initiative coordinated by ITAC and

implemented through H.I.A. & Associates.

Benefits to the Firm

In 1992, Braunstein was seriously considering

closing its manufacturing operations in response to what seemed to be overwhelming overseas

competitive pressure. In 1996, closing down its

plant is not even a remote possibility. During the

early 1990's, the firm's sales had continued to

rise—from increased import business—despite

waning manufactured product sales. However,

after 1994, most of the sales increases were

attributed to the company's manufactured goods.

Over a two-year period, Braunstein's overseas purchases decreased by over 20 percent.

Increased efficiency has reduced operational

costs by 25—75 percent, depending on the

specific function. Braunstein's customer base

increased due to improved product quality and

delivery time, helping the company gain back some of the ground it had lost in the pricesensitive jewelry market. Furthermore, as the company began to shift from importing to more

manufacturing, Braunstein became more flexible

in terms of product design and delivery. While

product lines were expanding, quality was also improving as a result of the statistical control

system. A direct relationship existed between the

increased value-added built into its products and

Braunstein's competitive gains in the

marketplace. The final result is the company now

produces higher-quality jewelry with greater

efficiency at less cost. While the company chose

not to reveal the level of profit increase, it has noted that the increase in manufactured

products, coupled with the dramatic decreases in manufacturing costs, have significantly increased

the firm's overall profitability.

From a broader perspective, according to

partners Mr. Granofsky and Mr. Catania, "ITAC

played an important role in helping us step up to

the challenges that exist in our changing

industry." Mr. Granofsky added: "ITAC has a

track record of results... It offers a bounty of

services to manufacturers who are willing to take advantage of its know-how and resources." Said Mr. Khan: "ITAC is right there helping people

who want to improve theirbusinesses. It is great

to know that we can tap into their technical

expertise as we need to."

11-15
Public Benefits

In 1992, before the productivity initiative, 80

employees worked at Braunstein. Today, there are

110. While some of the new hires do not work in manufacturing operations, the vast majority do. Approximately 20 to 25 new plant workers were

hired and close to 50 manufacturing jobs were

retained as a direct result of the firm's improved

and expanded manufacturing operations.

11-16
CHRONOLOGY OF SERVICES

• Braunstein is founded.

• Braunstein begins to lose competitive ground to imported jewelry.

• ITAC assesses Braunstein's manufacturing operation and

recommends a comprehensive productivity improvement

project. ITAC identifies industry specialist, scopes work, and

helps company obtain an lEP grant.

• Braunstein begins productivity initiative to improve worker

efficiency, and product quality, reduce costs, and formalize

processes.

• Braunstein's manufacturing performance improves: employee

productivity triples, cycle time decreases from 5 to 4 weeks,

quality improves 15—20 percent, and costs dramatically

decrease.

• Braunstein is now manufacturing 50 percent of its jewelry.

• ITAC develops and manages 50-hour skills training project for 15 Braunstein new hires to improve, diversify, and upgrade

their skills.

• ITAC continues to provide guidance and access to technical

expertise and modernization resources to Braunstein. Braunstein continues to invest in its productivity improvements

and its workforce.

11-17

1947

1992

1993

1994

1995

1995 - 1996

1996

Case Study

BUERK TOOL AND MACHINE CO., INC

Buffalo, New York

WESTERN NEW YORK TECHNOLOGY DEVELOPMENT CENTER, INC.

an affiliate of the IVlanufacturing Extension Partnership

November 1996

Prepared by:

Sue Scherred

Western New York TDC

Amherst, N. Y.

and

Douglas Welch

Nexus Associates,Inc.

Belmont, Mass.

11-19

A S E STUDY

Buerk Tool and Machine Co., Inc.

Founded in 1919, Buerk Tool and Machine Co. is

a family-run, general-purpose machine shop. The

business originally designed and manufactured

special-purpose machinery and printing presses, and has evolved to produce precision machine tool components to print from castings, forgings, and raw stock. The company services 30—35 original

equipment manufacturers (OEMs) in Western New York. Printing and specialized machinery

volume has declined to the point of repair work

and an occasional spare part build. Buerk Tool now is a job shop, and likes its reputation for being flexible with incoming order timing. They

generally pursue specialized projects, where garage

type shops cannot compete effectively. Their

strategy has been to service an existing customer

base rather than develop new business.

Buerk Tool's manufacturing facility is contained

within a 23,000-square-foot area of a two-story

building that they own. They use a broad range of machinery and processes, including jig boring,

grinding, computer numerically controlled (CNC)

turning and milling, horizontal bore machining,

and manual lathing and milling. A wide range of

parts and part sizes are produced, which adds to

the complexity of order tracking and material

storage.

Buerk Tool employs 14 people, 11 of whom are production personnel. The management team

consists of Richard Buerk President, Owner; Don

McCourt, Plant Manager; and Kevin Foley,

Methods Engineer. A small clerical staff supports

the business. The shop is non-union, and

machinists are routinely moved to various tasks on an as-needed basis. The labor force is experienced and turnover is low. The outside

sales force consists of Mr. Buerk and two

manufacturer representatives.

Technical Assistance Provided

Buerk Tool was Reminded of TDC Services at Just the Right Time. For some time prior to the

first project assistance it provided the company,

the Western New York Technology Development

Center, Inc. (WNYTDC) and Buerk Tool had

known one another. In fact, TDC has record of a

visit to Buerk Tool in 1993 and, according to Mr. Buerk, had actually been in touch on many

occasions. Mr. Buerk was also a personal

acquaintance of TDC's president from the days

when he served as chairman of a local small

business development association. Until 1995,

however, TDC did not provide Buerk Tool with any substantial services.

In early 1995, Mr. Buerk recognized that his

plant was struggling. The shop floor had long

been choked with scrap and obsolete equipment.

An upswing in orders exacerbated layout and

clutter problems by adding piles of work-inprogress to the shop floor. It became difficult to walk through the shop, let alone maneuver

forklifts. At least one key area was truly

impassable to the forklifts, such that the work

11-21
would be piled on the floor and then carried to

specific machines piece by piece on hand carts.

It was at this point that Mr. Buerk attended a

presentation by Bob Martin, the president of TDC,

describing the manufacturing services that were

available from TDC. Mr. Buerk viewed TDC anew

in light of his current problems, and requested a

site visit. John Murray, Project Manager and Alan

DeForest, Project Engineer of TDC, paid Buerk

Tool a visit and helped them focus on specific

areas in need of change. This initial assessment

targeted manufacturing machine placement,

housekeeping, and inventory control as the areas

poised to benefit most from significant

improvements.

TDC Staff Spent 80 Hours Assessing the Shop

Floor and Crafting New Plans. TDC provided

direct technical assistance to Buerk Tool over the

course of five months. Mr. Murray and Mr.

DeForest spent 80 hours working with Buerk

Tool. The project team of DeForest, Murray,

Buerk, Foley and McCourt met at least once

weekly. TDC services were provided to Buerk Tool

for a total fee of $2,800.

Mr. DeForest took the primary service provision

role at Buerk Tool. With professional expertise in

plant layout and workflow analysis, he was wellsuited to the task. Representatives of Buerk Took

stated that receiving an outside opinion was a vital

precursor to change. Moreover, Mr. DeForest was

immediately respected and was soon afforded the

trust required for a major plant overhaul.

TDC formed an interdisciplinary team of Buerk

Tool employees to collect and analyze data and to recommend process and layout improvements. The

team met weekly. At the conclusion of each

meeting, action items were assigned to team

members, who were then responsible for their completion. Through this process, the company

gained the commitment of their employees for the proposed changes.

The primary component of TDC's work was a computer-aided design (CAD) analysis of the workflow of jobs through Buerk Tool. Using the

records from a random sample of 14 recent Buerk

Tool jobs, Mr. DeForest simulated the workflows

of these jobs through the plant, both quantitatively

and visually. He then devised two alternative

layout schemes to minimize the travel distance for

these jobs. These optimization models accounted

for a number of constraints, including the

locations of large milling and lathe machines with

independent concrete foundations that could not

be moved.

To assess the importance of specific machines, Mr.

DeForest analyzed previously collected machine

utilization data. In most cases, analysis confirmed

existing suspicions that machines were

underutilized. The analysis also demonstrated that under-used machines were taking up key

floorspace.

TDC presented Buerk Tool with a variety of recommendations to improve their production

area, including housekeeping procedures, tool and

materials storage, a new bay door to improve

product flow, and better utilization of floor area. For each layout and process change proposed, the

11-22
TDC engineer presented the company with an

independent study demonstrating the effectiveness of similar changes at other facihties. This process helped convince the Buerk Tool management team

that these major layout changes had promise, so they accepted the entire plan.

TDC Introduces Buerk to Job Boss^"^. In the

spring of 1995, TDC referred Mr. Buerk to a National Technology University seminar on

industrial manufacturing information systems.

Through this seminar, Mr. Buerk was exposed to Job BossTM work tracking software and became

convinced of its applicability to his plant. As a

result, Buerk Tool has begun using Job Boss^"^ and

will soon be running it on a local area network

linking the shop floor and offices.

Changes in Practice

Major Changes on the Shop Floor Result in Major

Changes in StaffActivities. Although

implementation of the plan is not yet complete,

observers inside and outside the plant report major

changes in the form of new practices, both in the shop and office.

• As a result of changes in the plant

layout, material handling time has been

reduced, and the distance that materials move

from start to finish has decreased. The effect

is a decline in work-in-progress inventory.

• Improved housekeeping procedures,

which included rerhoving or reducing the

quantity of underused or unused machinery,

scrap, and work-in-progress, have further improved work flow.

Multiple observers, including

customers, already have noted a dramatic

improvement in housekeeping throughout the

shop. This improvement is the result of

efforts by the entire shop staff. While TDC

has recommended the hiring of a utility person for cleanup, the shop thus far managed to achieve improved housekeeping

with its existing staff. Similarly, the storage of hand tools has improved.

Installation of a new overhead door has

enabled more efficient removal of scrap and

spent oil from the shop. This door is planned

as a new shipping point when other layout

changes are in place. Use of the new door will allow a more direct flow of work through the

building and avoid the dual use of a single

bay for both receiving and shipping.

A new workspace has been created in what was formerly a loading and storage bay

through the installation of a new radiant

heating system. This workplace now houses a

large saw relocated from the main shop floor.

The Plant Manager has more time to spend planning and scheduling production

and delivery at the beginning of the

operation; the Process Engineer has more

time to attend to manufacturing issues.

Through the sale of old machines,

Buerk has generated $2,200. In addition, some of the scrap that had accumulated

above the machine shop has been sold.

11-23
Buerk Tool was principally responsible for implementing the new layout. Following

completion of the layout and process improvement

plan, Buerk Tool was principally responsible for implementation. While the process was more

difficult than predicted, follow through has been

excellent. Most staff members have been involved

in the cleanup and moving process. Through

careful planning, Buerk Tool avoided major work

disruption. A professional industrial rigger was

hired for all major machine movements.

The first machine was moved in October 1995,

just days after the layout plan was finalized. By

December, half of the relocation work had been

completed.

Other recommendations are currently being

implemented, including the use of Job Boss

software, bar coding for the traveler sheets that accompany specific jobs through the shop, and the

installation of the LAN.

Changes in Manufacturing Performance

According to Mr. McCourt, without TDC, "...we would just be plodding along the same as always, some years making money, some years in the red." According to Buerk Tool staff members, process flow improvements will reduce production costs, speed delivery time, improve shop safety, save

costs by freeing up space, free up managers' time

for more productive activities, and improve the appearance of the shop to customers.

Process flow improvements will reduce production

costs. A major impact of the project will be cost savings as a result of reduced product movement

through the shop. With the relocation of machines,

the movement of a product from receiving to shipping will be substantially reduced. For

example, one job moved 328 feet prior to

assistance; after the project is completed, its movement will have been reduced to 122 feet. The

average movement reduction calculated for a sample of 14 actual jobs was 30 percent. Clearly, every eliminated movement of work and personnel

through the shop will reduce the time required to complete a job. This will help Buerk Tool both

reduce production cost and increase delivery speed

to customers. Future implementation of a data

collection process will enable Buerk Tool to

calculate production costs and cost savings

associated with the process improvements.

...Speed Delivery Time. The movement of machines

and reduction of clutter has opened shop floor

aisles. Cleared work surfaces have made tools

easier to find. This will further speed movement of product through the shop and improve overall throughput and on-time delivery rates.

...Improve Shop Safety. For many processes, product and stock materials (rods, tubing, etc.) are

carried through the shop by hand. Other moves are made on hand carts and forklifts. In all cases,

cleared aisles will improve the overall safety of the

shop. Moreover, housekeeping improvements,

including the removal of oil from the floor, will

further improve shop safety.

11-24
...Save Space-related Costs. With the new layout, some 1,360 square feet of floor space has been

freed up for productive uses. Given total

utilization, the value of the space is approximately

$5 per square foot, for a total value of about

$6,800. This would have been the cost if Buerk

Tool had purchased new space rather than freeing

it from existing space.

...Free Up Managers for More Productive

Activities. Managers report that shop floor improvements will allow them to focus more of

their attention on other matters. Mr. McCourt

reports he will have more time for up-front job

planning efforts. Mr. Foley says he will have more

time to interact with customers and bring in

additional work. Every hour of extra attention to

these matters will save Buerk Tool money.

...Improve the Appearance of the Shop to Customers. According to Mr. Foley, at least one

customer has already seen the shop floor and

remarked on the new cleanliness and orderliness of

the workshop. To the extent that customers are exposed to the shop floor and are impressed

enough to increase their business with Buerk Tool,

sales may increase as a result.

...And Make the Whole Organization Less

Resistant to Change. The president of Buerk Tool

is now willing to begin removing machines from

the floor. "I had a love affair with certain machines," reported Mr. Buerk, "but Al talked me

into getting rid of some." Causing Mr. Buerk

particular anguish was the elimination of a

particular lathe—one of the first CNC lathes ever

produced with a vacuum tube-driven controller as

large as a filing cabinet. The lathe was rarely used,

however, and its removal opened a large space in

the middle of the shop for a new machine. This new machine has unique capabilities which will

afford Buerk Tool a capacity not shared by many

of its competitors.

Business Outcomes

Buerk Tool had a record year in 1 995 and

attributes much of this to TDC. In 1995, Buerk

Tool sales increased 20 percent over the previous

year for record sales of $1.4 million. Mr. Buerk

attributes 17 percent of the increase (85% of the

total change) to the efforts of TDC. He reports

that through increased shop capacity, additional

orders could be filled. He believes Buerk Tool

would not have been able to take advantage of

increased demand without TDC's involvement:

"Without the assistance nothing would have

happened. We would have continued repeating the same behaviors and expecting new outcomes." Mr. McCourt concurs, saying that without the

changes, "We would not have been able to respond as well to the upswing."

Mr. McCourt reports that the market is very

competitive. For certain jobs, "There are lots of

small shops that can undercut Dick's price." The

staff hopes that the addition of new machines, for which there was previously no room, will increase Buerk Tool's specialization, job capacity, and

general competitiveness. CNC programmer John

Regensdorfer put it simply, "If we get new tools, we can do the job faster, which costs less money, which means we can keep our jobs."

11-25
Given the will to grow, Buerk Tool has great

capacity: They have a very large work space and

over 50 machines operated by only eight workers.

If increased sales continue, Buerk Tool has

substantial potential for hiring new employees.

In the meantime, the employees of Buerk Tool

received a 5-percent wage increase and a 15-

percent bonus this year in response to the plant's

strong performance.

Competing Explanations

A case can be made that the increased sales Buerk

Tool experienced in 1995 were principally the

result of increased demand from a strengthened economy. However, Mr. Buerk contends that the

plant could not have responded to this upswing as

effectively without assistance.

While Mr. Buerk attributes 85 percent of the company's 20 percent sales growth in 1995 to TDC efforts, the link may be weakened by the fact

that project implementation is not yet complete.

However, many staff members attested to the great

improvement in work flow through the shop that had already taken place.

Developing the Big Picture

Over the years, Buerk Tool staff had become

aware of several problems in its manufacturing

operations and had addressed them individually.

TDC offered a more global perspective to Buerk

Tool management, demonstrating the

interdependency of its processes and the importance of maximizing capital utilization. An

example of ineffective use of capital and only

partially developed planning strategies was the purchase of a new 20-inch radius swing lathe. There was no plan to maximize its utilization and

the machine's placement was dictated solely by

available floorspace.

Perhaps the biggest long-term impact of TDC on

Buerk Tool will be to increase the company's

interest in change. Mr. Buerk characterized this

interest as a change in the "culture" of the

organization that has the management team and

machinists alike taking a renewed interest in

strategic issues. In discussing with Buerk Tool the company's situation, TDC had argued that new

practices were desirable, possible, and ultimately

profitable, and thus helped Buerk Tool recognize

that change was necessary for everyone, including

the president. According to Mr. Buerk, "You know,

I think the best result of the project we did with

TDC is an attitude change in our people. There is

less resistance to change now. Now they buy into

the process because they're seeing the improvements."

The challenge is to maintain an environment that

fosters continual improvement. Although TDC

involvement is now "trailing off," Buerk Tool staff

are confident they are headed in the right direction. TDC's role is to monitor the company's

performance and implementation of changes.

11-26
Case Study

CARVER PUMP COMPANY

Muscatine, Iowa

IOWA MANUFACTURING TECHNOLOGY

CENTER

an affiliate of the IVlanufacturing Extension Partnership

November 1996

Prepared by:

Jan Youtie

Economic Development Institute

Georgia Institute of Technology

Atlanta, Ga.

11-27

S E STUDY

Carver Pump Company

Carver Pump Company (Carver) manufactures

standard and custom pumps for commercial and

military markets. Established in 1938, the company now employs 126 workers on sales of

less than $20 million. Carver operates out of a

single facility in rural Muscatine, Iowa.

ISO Implementation Assistance

Carver built its initial business on supplying

centrifugal pumps to the Navy. By the early

1990's, it received about 70 percent of sales from

the defense industry. In response to declining

defense industry orders, Carver wanted to enter growing commercial markets in Europe and bid on

contracts from certain large U.S. manufacturers. These potential new commercial customers

required their suppliers to be certified to the ISO- 9000 quality standard.'

Technical staff from the Iowa Manufacturing

Technology Center^ (IMTC) had been contacting Carver on a regular basis. In one of those

meetings. Carver's president asked about ISO- 9000 certification. Two Iowa MTC engineers

began to work with the company in the fall of

1993.

The Iowa MTC engineers provided 250 hours of

assistance over the 16-month certification period

including the following:

• Interpreting ISO specifications.

• Providing a gap analysis, which

compared Carver's current quality manual

and other documentation to ISO

requirements.

• Arranging meetings with six other similar

manufacturers in the region that were

undergoing or had completed ISO

certification.

• Providing training, including assisting

with training of all Carver employees in the ISO-9000 standard.

• Structuring Carver's documentation to

focus on certain important operational areas,

thereby minimizing the amount of documentation.

• Conducting a pre-assessment audit of

Carver's documentation just before the

official ISO-certification audit.^

Carver spent about $80,000 to become certified. To implement the system. Carver hired and trained an ISO coordinator, formed a management

steering committee, selected a registrar, and

developed and executed an implementation plan.

11-29
ISO Certification Obtained

Carver received ISO-9001 certification for the

design and manufacture of specialized process,

industrial, and marine centrifugal pumps on April

17, 1995.'* It was the first company in Muscatine

to become certified. The process took 16 months,

much less than the 24-month average time for companies in Carver's size class. ^ Carver management attributes this time savings to the

assistance received from Iowa MTC engineers, as

well as to management commitment, low

employee turnover, and experience with

compliance to military quality standards.

New Sl<iils for Staff, Stronger Regional

Relationships among Firms

Carver staff gained new skills and other benefits as

a result of implementing the ISO standard. Training each employee to the standard enhanced

"employee buy-in" to the process considered

critical to attaining certification. Expenditures on

training rose from virtually nothing to about

$50,000, 40 percent of which went for ISO

certification training. Communication was also improved, particularly among employees in order

entry and contract review, and in engineering and

design control areas.

The meetings linking Carver to other ISO-certified manufacturers in the region helped Carver staff

learn "the pitfalls of implementation" and

provided insights that "opened the Carver Pump

managers' minds, allowing them to interact with

other managers of the same functions to solve implementation problems."' Carver, in turn, became a resource for other small manufacturers

in the region to obtain assistance with ISO-9000

implementation issues. One Davenport, Iowa,

manufacturer had deferred implementation until meeting with Carver representatives. That

company has since become certified.

New Commercial Markets and Export

Sales

Carver's sales composition substantially changed

following ISO certification. For the first time, the company could bid on Westinghouse Electric Corporation business available only to ISOcertified suppliers. Carver management estimates

that this business, which currently amounts to $70,000 in sales, could rise to $300,000 or more.

Carver also received its first export business. Just before becoming certified. Carver received orders

for turbine pumps totaling nearly $200,000 from

Italian manufacturer Ansaldo.^ Company officials do not believe they would have received this order were they not approaching certification, and

believe, more generally, that certification is

necessary to compete successfully in export

markets. Currently, Carver also is bidding on

business from a German manufacturer and is working with an Italian manufacturer to jointly

design larger high-pressure pumps for worldwide

distribution. Carver estimates that about 5 percent

of its sales are now export-related, with that share expected to rise to 15 percent in the next few

years.'

These efforts contributed to a reversal in the percentage of sales to military and commercial

markets. Today, about 70 percent of Carver's sales come from commercial customers. This change has maintained the stability of Carver's sales levels in

the face of a 40-percent decline since the late

1980's in orders from key military customers like

the Navy. Table 1 summarizes these benefits.

11-30
Importance of Ongoing Assistance to

Small Manufacturer Success

Carver management does not believe the plant could have become certified without outside help,

contending that it could not have afforded most

private consultants. More significant was the ongoing assistance that Carver received from the Iowa MTC engineers throughout the 16-month implementation period. Carver's

president said, "Consultants usually come in and

leave, and the small manufacturer doesn't know

what to do. The Iowa MTC engineers worked

with us like they were part of the company. They

had rapport with our employees. They knew 90

percent of the employees by name. That's so

important."^

Table 1 Training and Sales Benefits from

Iowa MTC Assistance with ISO Certification

Benefit Area Before Iowa MTC Assistance

with ISO Certification

After ISO

Certification

Training Virtually no formal training ISO-related training

• $20,000 investment in

Commercial

sales

30 percent commercial

70 percent defense-related

• 70 percent commercial 30

percent defense-related

Export sales Virtually no export sales • 5 percent export sales

(including nearly $200,000

to an Italian manufacturer)

11-31
CHRONOLOGY OF SERVICES

July 1993

September 1993

October 1993

November 1993

March 1994

July 1994

August 1994

November 1994

February 1, 1995

March 1995

April 1995

April 17, 1995

June 14, 1995

July 1995

February 1996

• Initial meeting held between Iowa MTC and Carver Pump

Company (Carver).

Carver hired ISO-9000 coordinator. Iowa MTC reviewed Carver quality control manual against

ISO-9000 requirements.

Iowa MTC conducted gap analysis/readiness audit.

Carver formed ISO management steering committee.

Iowa MTC helped Carver plan its implementation strategy. ISO coordinator attended week-long lead assessor course. Iowa MTC arranged for Carver to begin visiting other certified companies to obtain implementation assistance.

Carver chose Intertek Services Corporation (Intertek) as th

registrar. Iowa MTC conducted Internal Auditor training.

Iowa MTC and Carver's ISO coordinator trained all employees

in the ISO standard. Documentation assistance was provided by Intertek.

Carver presented pro forma invoice against letter of credit for

sales to Italian manufacturer, Ansaldo, upon condition of ISO

certification. Documentation audit conducted by Intertek.

Preassessment audit conducted by Iowa MTC.

Formal certification audit conducted by Intertek.

Carver Pump Company received Certificate of Approval from

Intertek.

Carver Pump Company held open house to mark ISO

certification.

Carver Pump Company management met with Davenport,

Iowa, manufacturer to provide assistance with ISO

implementation issues.

Sales order acknowledgments sent to Westinghouse Electric

Corporation.

11-32
ENDNOTES

1. Interview with president and CEO, Carver Pump Company, April 22, 1996.

2. Services for this project were provided through the Center for Industrial Research and Services (CIRAS) at Iowa State University, a partner organization within the Iowa MTC program.

3. Interview with Iowa MTC project team, March 29, 1996.

4. Intertrek Services Corporation, Certificate of Approval 95-370, April 17, 1995.

5. Sheila McKenna, "Kudos to Carver Pump: Certification opens up access to world markets,"

Saturday's Journal, No. 108, May 6, 1995, p.l.

6. Interview with ISO coordinator. Carver P^amp Company, April 22, 1996.

7. Verl Anders and Don Brown, "Carver Pump earns ISO-9001 certification," CIRAS News, vol. 29, no.

4, summer 1995, p. 7.

8. Pro forma invoice used to present againstletter of credit to Ansaldo GIE, Italia, Italy, February 1, 1995.

9. Sheila McKenna, "Kudos to Carver Pump: Certification opens up access to world markets,"

Saturday's Journal, No. 108, May 6, 1995, p. 5.

10. Interview with president and CEO, Carver Pump Company, April 22, 1996.

11-33

Case Study

CENTURY AERO PRODUCTS INTERNATIONAL, INC.

Los Angeles, California

CALIFORNIA MANUFACTURING TECHNOLOGY

CENTER

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Greg Rosen NISTMEP

Gaithersburg, Md.

and

Rick Fingerhut

California Manufacturing Technology Center

Hawthorne, Ca.

11-35

S E STUDY

Century Aero Products

International, Inc.

Cenmry Aero Products International, Inc. (CAP)

has been delivering airplane luggage containers to commercial airlines for 10 years. Despite fierce competition, this Los Angeles-based manufacturer was able to penetrate the market and grow its market share because of the container's specially

patented interlocking joints. Compared to other

container designs, CAP's containers require less time to assemble and disassemble, and do not

require any new parts—such as bolts—to

reassemble. With its staff of 50 employees, CAP

had annual sales last year of $7 million. Currently,

24 airlines use 30,000 of CAP's containers for

their daily operations, accounting for around 15

percent of the total market.

CAP Cites Need to Expand Product Line

Like most smaller manufacturers, CAP's CEO, Mr. Ted Dunwoodie, wanted to expand his company's

product line to increase CAP's sales volume. The

challenge for CAP was to locate and hire the right team of people to develop new marketable

products, and to find the funds to pay them. Meanwhile, in the wake of a number of high

profile terrorist bombings, the Federal Aviation

Administration (FAA) decided that airline

containers needed to be more bomb-resistant. To

accelerate the development and manufacture of

such containers, the FAA put out a solicitation

offering to test and subsidize the

development of airline containers with the

potential to meet the FAA's new, more stringent

bomb blast specifications.

CMTC Identifies Opportunity, Works on FAA Proposal

Rick Fingerhut, a field engineer at the California Manufacturing Technology Center (CMTC), was

aware of the FAA's interest in facilitating the development of bomb-resistant containers. He

took the initiative to make some calls to the FAA

in June 1995, to learn the status of the FAA's recommended and required container

specifications. As a result of his calls,

Mr. Fingerhut learned that the FAA was planning

to put out a solicitation for organizations to design

a cost-effective, bomb-resistant container Having

recently completed a technical assistance project

with CAP, Mr. Fingerhut was aware of the company's production capabilities, and proposed

that he help it come up with a proposal to win the

solicitation.

CAP was initially skeptical about competing in the FAA solicitation. The company felt it did not have

the time or the financial resources to find suitable

partners to develop an improved container Other

organizations likely to submit proposals were much better financed and had knowledgeable in- house staffs that were more familiar with the

industry's R&D resources, such as suitable product testing facilities. Finally, after a number of

11-37
conversations, CAP contracted Mr. Fingerhut to

assist it with the activities associated with

submitting a proposal to the FAA.

An engineer with substantial experience in the composites industry, Mr. Fingerhut first identified

the resources necessary to redesign the existing

container to be bomb-resistant. His initial search

led him to a number of potential organizations,

from which he chose a subset based on their skills and price. Mr. Fingerhut settled on a team of three manufacturing partners to work with CAP: a

fiber manufacturer, a composite material

manufacturer, and a blast mitigation material

supplier.

To give the proposal even more credibility, Mr.

Fingerhut collected and analyzed past test results

of similar CAP products, and arranged for

additional product and materials analysis at Lawrence Livermore Laboratory, a Department of Energy facility with extensive experience in blast

mitigation testing. Mr. Fingerhut initially

envisioned one of the partners or a think tank to

actually coordinate the team and write the proposal to the FAA. However, he was

disappointed to learn that each potential

coordinating organization wanted a prohibitively

high project fee ranging from $100,000

$200,000.

Consequently, Mr. Fingerhut and CAP mutually

agreed to collaborate in developing the FAA

proposal themselves. The cost to CAP of Mr.

Fingerhut's assistance was less than $10,000.

CAP Wins Competition to Prototype New

Bomb-Resistant Container

Mr. Fingerhut and CAP submitted their proposal

to the FAA just before the February 16, 1996

deadline. A few weeks later, CAP learned that it had won the competition, beating out the six other proposals and receiving the highest ranking on

each of the FAA's eight evaluation criteria.

CAP Designs and Builds First Prototypes

After winning the competition, CAP asked Mr.

Fingerhut to play a role in implementing the

proposal. Over the next few months, he worked

with CAP and the rest of the project team on a number of technical issues involving the physical

design of the container and the selection of a bonding material that would hold the layers of the

container's paneling together. As of May 1996,

CAP was on schedule to deliver the first 10 of its prototype containers to the FAA. Over the next

1 8 months, it will deliver an additional seventy or

so containers.

CAP Reaps Initial Benefits, Virgin Market

Awaits

CAP will sell approximately $1.5 million worth of

airline containers to the FAA as a result of winning

the solicitation. Assuming that subsequent tests confirm the initial testing results, CAP predicts

that total container sales will be $20 to $40

million over the next 5 years. If, by then, the FAA

requires all planes to be retrofitted with bombresistant containers, then CAP is positioned to

achieve annual sales of around $50 million.

11-38
Public to Enjoy Enhanced Airplane Safety

at an Affordable Price

For the flying public, CAP's new container will enhance air safety by greatly reducing the risk that

a bomb detonated in a piece of luggage will

destroy an aircraft or even harm the passengers

sitting in the passenger compartment above. Another advantage of the new container is its

weight, which is similar to that of containers in

use today.

Earlier bomb-resistant prototypes, which weighed

over twice as much as existing containers, would

have cost far more for airlines to purchase and

use. The comparatively low weight of the CAP

container is good news for the airlines and the

public, given that around 90 percent of the

container's operating cost is attributable to the fuel

cost associated with transporting it.

11-39

Case Study

CHERAW YARN MILLS, INC.

Cheraw, South Carolina

SOUTHEAST MANUFACTURING TECHNOLOGY

CENTER

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

English Drews

Southeast Manufacturing Technology Center

Columbia, S.C.

11-41

S E STUDY

Cheraw Yarn Mills, Inc.

Cheraw Yarn Mills, located in Cheraw, South

Carolina, is a family-owned business established in 1917. Over the years, Cheraw has progressively

grown and expanded to become a manufacturer of

synthetic and blend quality yarns, with 275

employees and annual sales of $50 million. Most

of Cheraw's customers are located in the eastern

region of the United States. With increased

competition, particularly from Pacific Rim

countries, for this slowly growing domestic

commodity market, Cheraw was intent on

maintaining a world-class operation that produced

quality products.

The Challenge

Since 1989, Cheraw has been committed to continuous improvement programs such as total

quality management (TQM), team building,

capital investments, and customer partnerships to

protect its domestic market. However, the rise in

cotton prices and increased operating costs, along

with slowing U.S. demand, was making

competitive performance critical to survival. In

addition, Cheraw was interested in exporting.

Malloy Evans, president of Cheraw Yarn Mills,

realized that to continue to be competitive, the company needed to move to the next level of

performance.

ISO registration appeared to be an option to build and strengthen the company's position; however, Mr. Evans and his staff perceived it to be too

expensive, too cumbersome, and too time

consuming, with limited chance of success. They

were also concerned that ISO-9002 registration

(the quality standard appropriate for their

business) was just a "rubber stamp" addition to

place on a company's stationery. "In a commodity

market like ours, without brand identity, we had

to know that being ISO-9002 registered would

make us a better company," summarized Mr.

Evans. The Southeast Manufacturing Technology

Center (SMTC) helped Cheraw break this barrier

to innovation by demonstrating that ISO-9002 was an affordable, effective solution to help the company maintain its competitiveness. In other words, they couldn't afford not to do it.

The Solution

SMTC's ISO-9000 technical consultant, Mel

Stauffer, was eager to coach Cheraw through the ISO-9002 registration process. Impressed by Mr.

Stauffer's 100-percent success rate with other

small manufacturers, as well as his process and

timeline to achieve registration, Cheraw was

committed and determined to become ISOregistered by the end of 1995.

To prepare Cheraw for registration, Mr. Stauffer committed two days per month to coach Cheraw

through five phases toward ISO-9002. The first

phase. Management Overview, created commitment throughout the organization by

establishing the implementation team and leaders

11-43
for each element within the quality standard. The

second phase, Training and Evaluation, trained all employees on the elements of ISO-9002, teaching

them how to conduct gap analyses and develop

improvement plans for those elements. Phase 3, Compliance, involved documenting Cheraw's

management system and establishing an audit procedure to ensure continuous improvement.

Phases 4 and 5, Readiness and Registration,

involved pre-assessment and preparation for

registration.

The Impact

In November 1995, Cheraw became the first manufacturer of sales yarn in South Carolina to become certified to the ISO-9000 standard. The

company passed the audit performed by the American Quality Assessors, making Cheraw one

of the most efficiently run manufacturers in the

state. As importantly, the company has improved

its operations in a number of areas, the impact of which has already begun to show.

In January of this year, Cheraw conducted a management review of the quality system. Over 50

percent of areas tracked in a weekly quality report

have shown improvements. Customer complaints

are down 15 percent, reducing costs by $10,000.

A 25 percent decrease in nonconforming product

has garnered a savings of $30,000. Supplier

quality assurance procedures have led to a stricter

evaluation (and in some cases elimination or probation) of those suppliers. "It is pretty clear our quality system is improving our capabilities

and demonstrating to our customers that we are taking the correct measures to ensure our product

meets or exceeds their needs," stated Robert

Angle, quality assurance manager for Cheraw.

Cheraw is considering expanding its product line and, based on the ISO certification, intends to

attract a broader customer base. Prospects for

survival in this competitive industry have

improved, and Cheraw has maintained its position

as a leader in the sales yarn market. "Attaining

ISO-9002 certification has inspired greater pride

and confidence in our employees," stated Mr.

Evans, "and we have been able to differentiate

ourselves against fierce competitors in a commodity market."

Alternative Explanations

In 1989, Cheraw made a commitment to do things

differently. The application of TQM principles

positioned Cheraw to adopt progressive, modern

management approaches and practices. Although

Cheraw had also worked with an industrial

psychologist from Clemson University in the area

of team building, this activity had taken the company as far as it could go. Another resource had approached Cheraw to help it with ISO

registration, but was out of the company's price

range. SMTC's program was considered

affordable, with a shorter implementation

schedule and a greater probability of success, based on SMTC's track record. Conceivably,

Cheraw could have proceeded with this project

and other resources but at a potentially higher cost and longer lead time. The impact and

manufacturing improvements that Cheraw realized

are directly attributable to the process improvements resulting from ISO-9002

registration.

11-44
CHRONOLOGY OF SERVICES

1993

1993-1994

1994

March 1994

April 1995

September 1995

November 1995

Became aware of ISO-9000 standard.

Interaction with Clemson Apparel Research, SMTC partner. Became aware of SMTC services for ISO-9000.

Proposal developed and accepted.

Project began.

Project completed.

Achieves ISO-9002 certification.

11-45

Case Study

CONSERVATION ALLIANCE, INC

Southbury, Connecticut

CONN/STEP

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Tab Wilkins CONN STEP

New Britain, Conn.

11-47

S E STUDY

Conservation Alliance, Inc.

Conservation Alliance, Inc. (CAI), based in Southbury, Connecticut, designs and sells replacement exit signs using Light Emitting Diode

(LED) technology. Current annual sales are under

$2 million. CAI manages a network of Connecticut subcontractors to engineer,

manufacture, and assemble the exit sign units.

Signs are sold directly to large end users or through energy service companies for installation

in colleges, universities, school systems,

government facilities (such as the Kennedy Center

in Washington, D.C.), and commercial offices.

The Market

The total U.S. exit sign replacement market is

estimated at 100 million units. While the replacement sign market grew slowly through the

late 1980 s and early 1990's, the growth rate

rapidly increased in recent years with the emergence of modern technologies that reduce

energy consumption and costs.

Typically, building codes mandate the installation

of thousands of exit signs in public buildings.

LED-based signs can offer substantial energy costs

savings—up to 98 percent—compared to older

incandescent designs. Replacement signs typically

pay back the investment in 18 to 24 months,

representing a real cost savings for building

managers pursuing low-cost capital improvements.

New LED technologies, sophisticated electronic

circuitry, and new manufacturing approaches have

helped fuel recent growth in the replacement

market. The handful of large companies

manufacturing exit signs for new construction is now moving into the replacement market. Up to 20 smaller manufacturers have entered the replacement market during the last 5 years.

In the past, replacement exit sign purchases

typically had been part of larger contract

renovation efforts, with price being the primary

selection factor. More recently, however, failures

experienced among lowcost units have made

quality the decisive market factor. CAEs desired

niche is to manufacture a reasonably priced sign

with superior quality.

Problem Identification and CONN/STEP

Assistance

The main issue confronting CAI was whether to compete in the replacement sign market or to go

out of business. The company needed a strategy to

deal with the increasing customer demand for

quality and the combined lower prices of

competitors. CAI sought outside guidance and

support in meeting these needs and in selecting a

course of action.

The company originally contacted CONN/STEP in August 1994, after attending a presentation by

Jake Mendelssohn, the regional field engineer. At

11-49
this time, the company had been operating for about 2 years, with annual sales of approximately

$500,000. The two specific issues for CAI were

reducing manufacturing cost and, ultimately, price,

while ensuring or improving reliability in the

electronics. With reasonable strategies in hand,

CAI would continue to operate in Connecticut.

Initially, two projects were identified: one to adopt

injection molding as the basis for manufacturing

major sign components, and the other to extend

the life of the exit sign circuitry. The company also implemented a new supplier management strategy, and has initiated development of a sign retrofitting

kit by redesigning the attachment base.

Adopting Injection Molding. One initiative aimed

at reducing manufacturing costs was to change

materials and overall manufacturing processes. The idea of using plastic in place of metal

components was first discussed when CAI

considered bidding on a Navy contract that

required non-corrosive materials for coastal

locations. Plastics offered protection from

corrosion and the ability to reduce the number of components, reduce production costs through

volume, increase sign durability, improve optical

diffusion, and reduce weight. However, CAI had no experience or knowledge about working with

plastics.

CONN/STEP helped by conducting a preliminary

materials selection and by counseling CAI through

the pros and cons of adopting plastic injection

molding materials and processes for all of their

exit signs. CONN/STEP located companies that could develop and create the tooling and dies needed for this new manufacturing approach, and

provided support and counsel as CAI interviewed

potential suppliers in September 1994. CAI elected

to work with Livesy Mold and Manufacturing,

which completed the materials selection, tooling,

and dies by February 1995.

Extended Exit Sign Life. Some of CAEs

competitors offered a guarantee of 10 years, prompting CAI to offer a guarantee of 10 years for

its product. Superior quality had gained

prominence in the marketplace, and guarantees

and reliability had become important selling

points. The field engineer conducted a preliminary

review of the electronic circuitry, and identified

several problems needing correction if CAI wanted

to guarantee its signs for 10 years. CAI also wanted to improve the efficiency and optical

qualities of the LEDs, and to verify its claims about the circuitry with legitimate documentation.

CONN/STEP again identified outside expertise

and was able to help CAI review electronic circuit

designers capable of meeting its needs. CAI elected

to work with Ciarcia Design Work, beginning in November 1994, to develop the board circuitry.

The project was completed in December 1994.

Supplier Management Strategy. As part of its

overall improvement effort with CONN/STEP,

CAI hired a person to locate and qualify more

reliable subcontracted suppliers. CAI negotiated

better prices and delivery dates, and developed a long-term supplier management strategy.

Ongoing Initiative: Development ofRetrofitting

Kit. An additional project CONN/STEP is

currently undertaking with CAI is developing a new retrofitting kit to enable a facility to install and convert to the CAI sign without undergoing a complete renovation. CAI expects this product to

greatly expand sales.

Resources Committed. The field engineer, through

September 1995, had committed a total of 51

11-50
hours to the company, helping it select a new

manufacturing process and understand the

possibilities of new circuitry designs. The field engineer also located technical expertise for CAI,

helped it select various experts, and secured CONN/STEP contracts for two successfully

completed projects.

demonstrate with confidence the 10-year reliability

of its signs. As purchasers became aware that cheaper signs did not last, CAI was able to win more contracts, not as the low-cost provider, but

as the quality provider. Consequently, the company doubled its sales in 1995 compared to 1994.

Livesy Mold and Manufacturing and Ciarcia Design Works together provided a total of approximately 200 hours in outside consulting

expertise, the cost of which totaled $22,000.

Changes in Practice and Performance

With CONN/STEP's assistance, CAI was able to

select a specific plastic material to meet its needs. The plastics approach to manufacturing required a $75,000 investment in new tooling and capital

equipment. A new circuitry design was developed

and adopted by CAI for its product, ensuring the

legitimacy of its 10-year guarantee.

With the use of plastics and injection molding,

CAI was able to improve its output by a factor of

5—up to 200 signs per day—and reduce its manufacturing costs by 50 percent. Injection

molding reduced the number of parts, assembly

steps, and manufacturing costs, while improving

durability and the optical diffusion of the display.

The electronics improvement project easily

extended the life of the signs to 10 years. Without

this achievement, CAI believes it would have failed

in the marketplace.

In addition, CAI experienced a 50 percent

reduction in overall product cost, and, of that, half was due to the new supplier management strategy.

As a result of these changes alone, CAI increased

its ability to compete on various contracts for the manufacture of exit signs. Costs per unit were

lowered and quality was improved. CAI also could

Public Benefit

Without CONN/STEP's help, particularly on the

circuitry, CAI might have gone out of business.

Instead, CAI estimates it has added approximately

12—15 jobs to its Connecticut-based

manufacturing and assembly operations. Its growth will benefit its Connecticut suppliers as

well. For example, the recent doubling of CAI's

sales has created or saved approximately six to

seven jobs at supplier firms.

Moreover, CAI helped save at least four additional

jobs in Connecticut. A Connecticut-based

assembly house had just lost a large contract with

a major firm that was moving its assembly

operations to South America. The assembly house

would have closed except for CAI's expanded

work and modification of its supplier management

practices. Further, within the year, the major firm brought work it had been outsourcing to South

America back to Connecticut because of quality

problems.

Finally, CAI's progress has:

1) increased corporate taxes for the State of

Connecticut, in part through new capital

investment in equipment, tooling, and dies; and

2) increased state income tax revenues by

creating or retaining a sizeable number of instate jobs.

11-51
CHRONOLOGY OF SERVICES

August 1994 • Conservation Alliance contacts CONN/STEP for initial site visit

after attending Field Engineer presentation.

August 1994 • Three injection molding companies are contacted and

reviewed by CAI and the Field Engineer.

August 1994 • Field Engineer undertakes research for CAI on comparing

Light Emitting Diode brightness, lifespan.

September 1994 • Injection Molding project initiated with Livesy Mold and

Manufacturing.

September 1994 • Field Engineer begins to work with potential service providers

for electronic circuitry analysis.

November 1994 • Second project examining electronic circuitry of the sign is

initiated. November 1994 • Flelped company to locate contract assembly houses in

Connecticut that could support the plastic injection molding

assembly operations.

December 1994 • Second project on electronic circuitry is completed, new

design implemented, and documentation completed.

February 1995 • CAI project in injection molding is completed.

March 1995 • New design and manufacturing capabilities are implemented.

May 1995 • Third project undertaken to design new replacement kit.

11-52
Case Study

CUSTOM MATERIALS

Cleveland, Ohio

GREAT LAKES MANUFACTURING TECHNOLOGY

CENTER (GLMTC)

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Carol Lucas

Cleveland Advanced Manufacturing Center

Cleveland, Ohio

11-53

S E STUDY

Custom Materials

Located in Chagrin Falls, Ohio, southeast of Cleveland, Custom Materials (Custom)

manufactures electric product components. The

company employs 100 people and recorded $10

million in sales in 1994. Its subsidiary, CustomPac Extrusions, Inc., is located in Cleveland. The

company's market stretches from Canada to Mexico and clients include such major players as

Reliance Electric, General Electric, and

Westinghouse.

Impetus to Change

About 6 years ago, Greg Robinson, Custom's

president, was beginning to feel pressure from his competition and his customers to improve the company's product quality and manufacturing

practices. Mr. Robinson said he sensed "a tidal wave" coming at him as his major customers

started to inquire about the company's plans for

ensuring total quality, reducing costs, and

improving delivery, services, and products. One

million-dollar customer even told him to improve

his quality or the customer would take his business

elsewhere. His options were obvious: "Either I

figure out how to ride this tidal wave, or it will wipe us out." That is when he encountered the

Great Lakes Manufacturing Technology Center (GLMTC) in Cleveland and began an ongoing

relationship to discover the technology and

techniques to bring about needed improvements.

In the quest to find new ways to implement old

ideas, Custom's president had to learn some new

concepts that were foreign to him. Having gone

into the business with his father-in-law, Mr. Robinson said he did not expect to have to develop a business system for an organization

"where all the employees already know what

they're supposed to be doing." But he knew that something had to be done, or he would start to

lose business.

Introduction to GLMTC

Mr. Robinson discovered GLMTC at a breakfast meeting featuring the CEO of Reliance Electric Company, one of Custom's customers, as the guest

speaker. "I became intrigued with what GLMTC

had to offer," he recalled, and asked for a GLMTC

Strategies for Increasing Your Total Effectiveness

(SITE) operations assessment. He was pleased with

the results. Expecting a three-page report, Mr. Robinson was amazed when GLMTC delivered a 50-page document detailing everything from

management goals and quality assurance to plant

layout and management-employee issues.

"I looked at this thing and thought, there's enough

here that if I began to work on all these recommendations today, I would have 5 years' worth of work," he said. "Here we are, 5 years

later, and I still haven't finished them all." Indeed,

the quest became one of continuous improvement

for Custom as its relationship with GLMTC grew.

11-55
Technical Assistance Provided

Shortly thereafter, GLMTC engineers began

working with Custom to develop a quality assurance system. That project was followed by

the installation of a new business information

system, a new plant layout, a waste reduction

project, and an environmental project. Over time,

the project list would include areas of quality, gap

analysis, and plant layout. GLMTC has assisted Custom with a variety of business systems projects

and is currently helping the company with

software implementation. In all, GLMTC has provided a total of 33 deployment activities to Custom.

Specific assistance provided by GLMTC included

the following:

• Training resource reference

• ISO-9000/EPAyMarketing mformation

• Advice on implementing EDI

• Injection molding training information

• Bar code information

• Software assistance from the Cleveland

Advanced Manufacturing Program (CAMP),

GLMTC's host organization and MEP

affiliate

• Injection molding troubleshooting

• Synchronous manufacturing information

• Machine selection assistance

• Pattern nesting software

• Pallet changers for computer

numerically controlled (CNC) machinery

• Plant layout redesign

• Waste reduction assessment

Outcomes

Custom has experienced many positive

impacts on all facets of its operations as a result of GLMTC assistance. These include:

Better Quality Control. Custom has attained a

higher quality control standard, and improved the

ability of its product to pass new tests. Quality

control system improvements have made it easier

for the company to get new business, ensure

constant quality, and identify scrap and rework

issues.

Improved Manufacturing Performance. Physical

improvements related to Custom's manufacturing

performance include reduced scrap rates, an

increased percentage of on-time delivery, better

capacity utilization and materials handling, faster

set-up times, shorter lead times, reduced inventory

size, and less work-in-progress. All of these improvements—most stemming from improved

plant layout and faster throughout time—have

enabled the company to react faster to customer demands and to improve overall firm productivity.

In addition, its enhanced workforce organization

and training will help Custom not only sustain

these higher performance levels but improve upon

them over time.

Business Benefits to Firm. As a result of companywide manufacturing improvements. Custom has

experienced increased production, quality and

margin, along with reduced costs and waste.

11-56
Intangible benefits include a restored reputation

for the company's products, which promises

continued expansion of its customer base.

Resulting decreases in prices and customer reject

rates have also greatly benefited the company.

Given a new sense of direction, Custom has

significantly enhanced its annual sales, its annual

profits, and its prospects for survival. Mr. Robinson feels that by working with GLMTC to adopt technology improvements, he has readily

addressed his operational issues, and thus is better

able to capitalize on his market strategies and to

position the company to succeed in the industry.

Public Benefits

Custom's success has prompted the creation and/

or retention of jobs, better employee compensation

and productivity, and more exports. In a

reciprocal relationship with GLMTC, Custom is

able to provide honest feedback to GLMTC as it

tests ideas for new products, services, and

programs.

Beyond Dollars and Cents

Mr. Robinson views his continuous improvement

program as a journey. "Once you get going, there's no end to it," he said. "I know we've made a lot of

progress. We have a sense of direction and we've had some big accomplishments. We take a lot of

satisfaction in that, but know we still have a long

way to go."

He noted that his company's progress, direction,

and accomplishments, made possible by several manufacturing improvements, go beyond dollar and cents. To make the point, he asks a rhetorical

question: "If I had not made these improvements,

would I still be in business?" He answers with

another: "How do you put a price tag on that?"

ll.

11-57

Case Study

D. J. MANUFACTURING, INC.

Huntington, West Virginia

THE WEST VIRGNIA PARTNERSHIP

FOR INDUSTRIAL MODERNIZATION

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Lawrence D. Dixon

The West Virginia Partnership for

Industrial Modernization

Montgomery, W.Va.

11-59

A S E STUDY

D.J. Manufacturing, Inc.

D.J. Manufacturing, Inc. (DJMI) is a machine

shop that manufactures discrete parts for a builder of underground coal mining equipment. The

company has 39 employees and it has been located

in Huntington, West Virginia, for 32 years. The

company's annual sales are approximately $1.75

million. More than 60 percent of the company's

business comes from the J.H. Fletcher company, a manufacturer of roof bolters for the underground

coal mining industry. In recent years, the underground coal mining industry has experienced some downturns, which caused it to decrease its

acquisition of new underground coal mining

equipment. This decrease, in turn, compelled

DJMI to consider ways to supplement its business even though the company does not have a history

of actively seeking additional business. In 1989,

the company purchased a computer-assisted design

and manufacturing (CAD/CAM) computer system

to enhance its capabilities to program seven pieces

of numerically controlled (NC) and computer

numerically controlled (CNC) equipment. During

the start-up phase of this project, the supplier of

the CAD/CAM computer system closed its

business and ceased to support the relevant system

software.

Industrial Extension Assistance

Using a Computer-Controlled Coordinate

Measuring Machine. In 1993, Tom Bailey, P.E.,

the regional West Virginia Partnership for

Industrial Modernization (WVPIM) extension

engineer, was introduced to DJMI while he was

participating as a support resource for a business

retention and expansion program presented by the

local Chamber of Commerce.

After Mr. Bailey described WVPIM to DJMI, the company requested his assistance in identifying a

resource that could help the company develop a

patent application drawing of a braking system

prototype for a large earthmover. The elaborate shape of the part made the development of an

accurate drawing difficult. The company had been

unsuccessfully attempting to develop the drawing

for some time and its deadline for completion was

rapidly approaching.

Mr. Bailey suggested that the part be taken to the coordinate measuring machine (CMM) at the Robert C. Byrd Institute for Advanced Flexible Manufacturing Systems (RCBI). The CMM could

transmit measurements made on the part directly

to a CAD package. Within a 2-week period, the drawings were successfully produced and provided

to the developer of the prototype.

CAD/CAM Capabilities. Successful development

of the prototype drawing encouraged DJMI to

request further assistance from WVPIM. The

second request for assistance was for help in

identifying the problems the company was

experiencing with its CAD/CAM system.

11-61
Mr. Bailey worked diligently with DJMFs staff to develop an in-depth analysis of the problems

associated with the company's existing CAD/CAM

computer system, identifying problems with

hardware and software compatibility, connectivity,

and training. After an evaluation of available

technical support resources, WVPIM again

approached RCBI for assistance. RCBI had wellestablished capabilities for training and technical

assistance in CADKey, AutoCad, and

SMARTCAM.

WVPIM and RCBI jointly developed a proposal

for new computer hardware, software, and

training to meet DJMI's CAD/CAM needs. In

addition, RCBI systems engineers visited DJMFs

shop to gather information needed to assist DJMI

in writing specifications for post processors and

hardware connections for all the company's

existing NC and CNC equipment.

DJMI agreed with the suggestions in the proposal

and purchased the recommended hardware and

software. The company also enrolled three of its employees in CAD courses offered at RCBI.

Implementation Phase. The proposal for DJMI

included the following phases:

• Recommended hardware and software

for its CAD/CAM system

• CAD software training for employees

• CAM software training for employees

• Modification of post processors for the CAM software to be used with the company's

shop equipment

• Assistance in the connection of the new CAD/CAM system to each of the company's

individual machines

Replacements for "Smart Boxes." As the above

phases were being completed, another problem

became apparent. The problem occurred because DJMI had several pieces of NC rather than CNC

equipment. The programs for the company's NC

equipment were on punch tape and the equipment

used "Smart Boxes," which are electronic devices used to add memory and communication

capabilities to NC equipment.

These "Smart Boxes," which DJMI had used with

its earlier CAD system, were not compatible with

the new system. This incompatibility problem

occurred because the "Smart Boxes" were no

longer made or supported, had limited communications capabilities, and came with no

documentation on how to communicate with

them.

The new CAD system could have been used to

generate new punch tapes for the NC equipment,

but many of the anticipated advantages of the new

system could not have been realized. DJMI would

still have been required to maintain its volumes of punch tapes if the "Smart Boxes" could not be upgraded or replaced.

After discussing this problem with DJMI's staff, Zhang Jin, manufacturing engineer

for RCBI, began to investigate replacements for

the "Smart Boxes." During this investigation, Mr. Jin identified several replacement systems,

then requested that WVPIM's Tom Bailey assist him in evaluating the capabilities of each system.

11-62
This joint evaluation by WVPIM and RCBI

revealed that a system offered by Rybett Controls would likely be the best candidate to fulfill DJMI's computer interface needs. After arriving at this

decision, Mr. Bailey and Mr. Jin visited a manufacturing facility where the Rybett System was in use.

Observations of the Rybett System revealed that not only would it satisfy DJMI's fundamental,

interface needs but it would also provide the company with several new advantages. The Rybett

System consists of the following components:

• A communication network that could

deliver all programs to the appropriate

machine.

• A system for storing all machine

programs on computer disk. The programs

are now secure because the computer disk can

be backed up daily and a backup copy stored

off-site. In addition, the machine operators

need no longer be responsible for storing

volumes of punch tapes at each machine.

• Two remote shop terminals where

machine operators can download programs to

their machines.

New Manufacturing Practices

Several months after the successful installation of DJMI's new shop program system, the company

was able to cost justify the purchase of a new KOMO CNC vertical milling machine

(approximate cost: $150,000). The connection of

the milling machine to DJMI's new shop program

system occurred within the first few weeks of its

operation.

The use of the new control software provided the new machine with the same easy access to programs and central storage as DJMI's existing

NC/CNC equipment. Programs generated in the company's design station could easily be

transferred to the machine. Likewise, program

changes made at the machine could easily be

transferred back to the design station.

Benefits to the Firm

It is extremely difficult to measure DJMI's cost

reduction associated with their CAD/CAM

computer system improvements, but the year

following the completion of the project the company experienced an 18.6 percent reduction in

labor costs while sustaining production levels at approximately the same level as the previous year.

Bert P. Bays, president and CEO of DJMI, stated

that it is his belief that a major part of the company's decrease in labor cost resulted from a

reduction in plant overtime. Mr. Bays further

stated that he directly attributes this reduction in

plant overtime to the enhancements that the company made in its CAD/CAM computer system.

Furthermore, when the entire CAD/CAM

computer project was completed in 1995, DJMI

had a substantial competitive edge. DJMI can take

a part drawing created in a CAD system and,

utilizing its CAM package, create the programs

required to machine that part in a fraction of the

time needed to program the machine manually. As

a result, the company now starts production of new parts within a week if the drawings for the

part were created in-house, and within days when

a customer furnishes a drawing file in a compatible format. Lead time to put a new part

into production on NC/CNC equipment had taken

as long as a month.

11-63
DJMI is primarily a production shop, with

programs written for over 10,000 parts. The

programs previously had been stored on punched

tapes and kept at each machine in file cabinets. The elimination of punch tapes was beneficial in terms of security and in shortening the time

required to locate the right program. These

benefits contribute to shorter set-up times because

the appropriate program can now be retrieved by

part number.

All in all, the connection made with the local Manufacturing Extension Partnership (WVPIM)

was a vital link to services useful in moving a company toward lasting competitiveness and

world-class manufacturing status.

Illustrations of impacts are available from the author on special request.

11-64
Case Study

EXTRUSION TECHNOLOGY, INC.

Randolph, Massachusetts

MASSACHUSETTS MANUFACTURING

PARTNERSHIP

AT THE BAY STATE SKILLS CORPORATION

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Steven Ellis

University of Massachusetts

Donahue Institute

Amherst, Mass.

11-65

S E STUDY

Extrusion Technology, inc.

Extrusion Technolog)-, Inc., is a small manufacturer of extruded aluminum parts and

assemblies located in Randolph, Massachusetts. The unique aluminum housings manufactured by

60 employees at the company's 50-year-old plant

are used in a variet)' of applications, from modems

to fire alarm call-boxes. The production of these housings and other components is dependent on

rsvo sets of operations: the extrusion, or shaping, of aluminimi billet and the subsequent machining

and finishing of these pieces into final products.

When Extrusion Technology's president and

owner, James Sharpe, purchased the company

seven years ago, it was in a struggle for survival. Over the next several years, he implemented an improvement strateg}- in an effort to re-establish

the company's profitabilit)^ and, ultimately,

transform it into a world-class competitor: The

company is beginning to realize the benefit of this continuous improvement effort. In the past two

years. Extrusion Technology has enjoyed a

substantial 18 percent increase in sales. The

Massachusetts Manufacturing Partnership (\LMP)

has been an invaluable contributor to the company's transformation, assisting in the improvement of its internal communications,

productivit}', and new product development and

marketing.

MMP and Extrusion Technology collaborated in

the selection and design of three technical

assistance projects over the course of nine months.

\LMP identified private consulting firms to

conduct the projects, each of which has

contributed to the improvement of some aspect of Extrusion Technologj^'s overall performance and

competitiveness. This case study describes the development, implementation, and results of these

projects, with special attention paid to the reduction in set-up time and the market research

sur\'ey, both of which stand out as exemplar)-.

Making the Connection: Project

Development

Extrusion Technology's referral to MMP came

through an ISO-9000 certification program called ISONet, with which the company was working.

ISONet was administered by the Bay State Skills Corporation (of which MMP is also a program).

Jern- Rubin, director of MMP's Greater Boston

regional office, believes this referral is an example

of the highly effective network of manufacturing

ser\'ices emerging in Massachusetts. Ivlr. Sharpe's

call to MAIP was directed to MMP project manager, David Geschwind, who arranged for the two to meet.

Mr. Sharpe had a positive experience with ISONet,

believing his company distinguished itself among

its competitors by achieving ISO certification. Still, he maintained some skepticism going into his

initial meeting with MMP. The image of a bureaucrat reciting "I'm from the government and

I'm here to help" was one which he could not help

but recall. Contrary to this image, he found MMP

project manager David Geschwind to be capable

and committed to helping small manufacturers

understand their needs and realize greater

11-67
opportunities. Mr. Geschwind and MMP appeared

well equipped to identify and manage private

consultant expertise, and to turn ideas into

productive action.

Following their initial meeting, Mr. Geschwind

and Mr. Sharpe developed a list of improvement

opportunities for Extrusion Technology. They

prioritized this list on the basis of the company's

needs and MMP's ability to help. Ultimately, they

agreed to focus their work on three diverse

initiatives that would require training, engineering,

and marketing expertise. These initiatives

integrated both men's top priorities, which were

not always the same. For instance, Mr. Geschwind's insight and engineering background

catalyzed an engineering project to increase

productivity in the computer numeric controlled (CNC) machining department. The other two

projects would seek to improve cross-department

supervisor communication and production

scheduling through training, and solicit feedback

from customers through a market survey.

MMP, through its ability to leverage diverse

resources on behalf of small manufacturers, was

able to address Extrusion Technology's diverse improvement needs. This flexibility, which is a

function of MMP's service delivery model, enables

the partnership to develop trusting, long-term customer relationships. When appropriate, MMP

can meet a company's already identified improvement priorities, in addition to critical improvement concerns that project managers

diagnose. Mr. Geschwind believes, "It is very important that we have the flexibility to engage a

company in an ongoing relationship. We can't just

go in and say 'we know what's best for your

business.' We have to establish some credibility

with them first." Satisfied they were on the right

track, Mr. Geschwind and Mr. Sharpe agreed to

proceed.

Initial Project Focus: Supervisor Training

The Problem and the Assistance. Mr. Sharpe had

identified a pressing need for improved

communication among his top supervisors. Lack

of intra-departmental information sharing was

creating inefficiencies in production and delivery

performance. The supervisor training project

focused on improving supervisory skills and

enhancing awareness and use of scheduling boards

to facilitate production. These training needs had

not previously been addressed because Extrusion

Technology has no internal human resources department or specialist. The Employee

Association, Inc. (TEA), a private, non-profit

human resource and training services company, was found to have the specific training expertise

that the project would require.

TEA designed a program to provide supervisors

with a better understanding of the communication

demands of production and delivery scheduling.

The program also helped introduce a new

supervisor into the organization. The emphasis

throughout the project was clearly placed on

developing a team philosophy among Extrusion

Technology's supervisors, and linking the

attainment of organizational goals to the improvement of cooperation and coordination

among departments.

11-68
The Outcome. One year after completion of this

project, Mr. Sharpe reflected on its success: "The

project resulted in immediately improved

communication, which has directly impacted our

ability to work as a team." He noted that through

improved use of scheduling boards and more

effective supervisor communications, Extrusion

Technology has "virtually eliminated last-minute production expediting." The resulting

improvement in business performance includes a dramatic reduction in the late shipping rate by his company—from 17 percent to 5 percent.

According to Mr. Sharpe, no other factors have

contributed to this change. Along with the benefit

to customer relationships, Mr. Sharpe calculates

direct savings attributable to this project at $10,000 a year. The project also served as a

successful introduction of MMP services to Extrusion Technology and revealed to the company's supervisors and key management the

benefits of taking time out of busy schedules to make fundamental improvements in their

operations.

Set-Up Time Reduction

The Problem. The extrusion of aluminum, an

initial step in Extrusion Technology's

manufacturing process, is a fast operation

compared to the subsequent steps required to produce finished components. Therefore, the output of the CNC machining department, which

performs a number of these finishing processes,

controls the output of the entire operation. This

department had a longstanding backlog of work

and was regularly forced to send machine work to

outside vendors to meet production schedules. Mr.

Sharpe, who recognizes machining as his company's primary value-added activity, referred

to Extrusion Technology as "a machine shop with an aluminum extruder." Mr. Geschwind realized

that improving this department's operations was

critical to the company's immediate and long-term

competitiveness.

One element of the company's preparation for the MMP projects was the completion of a performance benchmarking questionnaire, a manufacturing assessment tool developed by the Performance Benchmarking Service"^. The

questionnaire measures business performance,

using a number of indicators, including set-up

times. The resulting report quantified company

set-up times and confirmed that the CNC

machining department was a critical area for improvement. Mr. Geschwind then initiated an

extensive search for a suitable consultant to

further assess and resolve the problems

confronting this department.

The Assistatice. His search led to Ned Emerson of Value-Tech Engineering, Inc., an expert in machining, CNC programming, and tooling and

fixturing. In Mr. Sharpe's words, "Even if we

knew we needed him, we never could have

identified Ned on our own. We wouldn't have

known where to start." Mr. Geschwind

commented, "He was the only one in the area who

had the right combination of skills for the job."

The three men collaborated in developing a scope

of work for the project.

Mr. Emerson began work by conducting a comprehensive assessment of the department. He

confirmed suspicions that poor machine utilization and overly extended machining cycle times were a major part of the problem. He identified a need

11-69
for fixtures designed to allow higher run speeds

and feed rates, and to reduce or eliminate tool changes that were extending machining cycle

times. Mr. Emerson also believed that purchasing

and implementing a CAD/CAM software package

would yield a substantial return on investment.

This software would correct another inefficiency

the need to generate numerically controlled machine programs line by line. Having identified

these problems and potential solutions, the team

then defined the project's scope.

Over ten sessions, Mr. Emerson worked closely

with Paul Redmond, CNC machining department

supervisor, to determine the most cost-effective CAD/CAM system for the department. On his recommendation, a $6,000 Licom system was

purchased and installed. Mr. Emerson then trained

staff to use it. The Licom system made an

immediate difference, eliminating the need to write

line-by-line machine instructions, thereby reducing

set-up times for all components (see Investment and Results, below). Mr. Emerson then began the improvement of set-up operations for five specific

components for which Extrusion Technology

receives regular orders. Innovative fixture design

and the development of specific procedures to guide the design and use of quick-change tooling

plates significantly reduced machining cycle times. The improved fixtures, coupled with the CAD/

CAM system, enabled the department to

significantly increase feed rates and run speeds on

the CNC machines. The ability to push more jobs

through at faster rates resulted in increased

productivity.

The Outcome. Ten months later, the results of this

project are impressive (see Table 1).

Table 1

Project Outcomes: Set-up Time Reduction*

Set-UpTime Reduction Sustainable savings $10,000/yr.

Production Increase Sustainable improvement $20,000/yr

Leveraged Capital Licom CAD/CAM $ 6,000

Investment CNC shop 50,000

equipment

rotary table,

pallet changer,

cutting tools, holding fixture

^Figures do not include staff time calculations

e

11-70
Extrusion Technology experienced a productivity

increase in the CNC Machining Department of between 100 percent and 200 percent, depending on the component being run at the time of measurement. The company has also reduced set- up times on the five target components by 50

percent and across the department as a whole by

40 percent. These performance improvements have

led to bottom line, sustainable savings of $10,000

a year from set-up reductions and $20,000 a year

in increased productivity from increased feed rates and run speeds.

In addition to these savings, the department now

sends much less work out to other machine shops.

While the company is not able to calculate the

savings from this change, the figure is believed to be substantial. The diverse nature of the jobs run by Extrusion Technology has confounded an exact

calculation of the resultant savings; because products and run volumes vary widely, it is nearly

impossible to create a benchmark for comparison

over time. The company will also reap additional

savings because the machining department has

increased capacity and confidence to design and

build its own tooling fixtures, allowing for

increased productivity and efficiency for future product runs.

Regarding the CAD/CAM system, Mr. Sharpe

remarked, "Ned gave us the confidence to invest

in a $6,000 CAM system that we can't believe we

didn't have before." Paul Redmond agreed, "It was something we knew we needed, but we

needed a push to get there." The confidence that Extrusion Technology gained through this purchase and successful implementation may be

the project's single greatest long-term impact.

According to Mr. Sharpe, the momentum created by this modernization project has resulted in an

additional investment of over $50,000 in new

equipment which otherwise would not have

occurred in the foreseeable future. The project

produced substantial productivity improvements,

leveraged further investment, and gave the company a competitive advantage.

Market Research Survey

The Problem and the Assistance. Encouraged by

the project's success in reducing set-up time, Mr.

Sharpe and Mr. Geschwind focused on the third

priority they had identified—a marketing research

study. After careful consideration, they contracted

Diagnostics Plus, a private consultant, to conduct

the market survey. The intention was to solicit feedback from Extrusion Technology's past and

present customers regarding, among other things,

their perceptions of the company's quality,

performance, price, and delivery, and to generate new product suggestions.

The survey's importance should not be

understated. Because Extrusion Technology's sales

are driven exclusively by catalog advertising, the company has a small sales team, which lacks the

expertise needed to design and implement a

sophisticated marketing survey. Diagnostics Plus

has that capability and, in consultation with Mr.

Sharpe, designed a survey sensitive to Extrusion

Technology's operations and customers.

Diagnostics Plus conducted the survey by phone

and synthesized results from 95 respondent customers in a comprehensive report to the company.

11-71
The Outcome. Mr. Sharpe was quick to point out

that "some real surprises" emerged from the

resporises received. "Customer feedback regarding

[Extrusion Technology's] performance in pricing,

quality, and delivery has already triggered changes

in the company's business practices." But the

greatest value of the study, according to Mr.

Sharpe, relates to the new product development

opportunities it presented his company. "Before I had this study, I would have told you from

speaking with our customers that they didn't need

anything else from us." But customers had a number of new product suggestions that are

already beginning to generate business for the company.

Six months after the study was completed, Mr.

Sharpe reached agreement with a customer to manufacture a new product, which he expects will

generate $200,000 in annual sales. He intends to

hire six new employees to meet the new

production demand (see Table 2), and is confident

that other opportunities will flow from the survey

in the future.

Table 2

Project Outcomes:

Market Research Survey*

New Product Increased sales Development this year $200,000

Additional Jobs Will result this year 6

Investment and Results: Understanding

the Impact of Massachusetts

Manufacturing Partnership Services

Extrusion Technology faces challenges common to many small manufacturers in Massachusetts: a

talented, dedicated staff who must strive daily to surmount the tremendous obstacles presented by

the varied demands of production in a highly

competitive global marketplace. Their processes

often rely on aging equipment; they cannot afford

to retain engineering and marketing specialists on

staff; and they work in the leanest possible

environment, with enormous demands placed on

managers' time.

MMP benefited Extrusion Technology and its

current and future employees by offering solutions

to these problems—solutions which yielded

significant, tangible results (see summary in Table

3). Its outside perspective, carefully trained on the

big picture, helps managers who are sometimes

too busy "putting out fires" to deal with the

underlying issues that affect their productivity.

"MMP leveraged confidence and created momentum for change and modernization among

our managers and employees," commented Mr.

Sharpe. As Paul Redmond confided, "Our CNC

machining department was operating in the late

1970's; now we're in the early 1990's." Managers

knew there was technology available to improve

their productivity, but lacked the resources to pursue it. MMP provided those resources.

Ultimately, it's all about making manufacturing

work. Small manufacturers can succeed, but they

often need a "little push." Such was the case at

11-72
Extrusion Technology, where sales growth

exceeded 18 percent the last 2 years and is expected to improve at a greater pace in the near

future. "There is no question, we would not have

undertaken these projects without the assistance of MMP," Mr. Sharpe reflected. The implications of

this

statement are clear. Without MMP, Extrusion

Technology would not have made these

investments to improve its internal communications and productivity, nor have

identified new product development opportunities.

In short, the company would not have moved

forward on the road to increased competitiveness.

. Table 3

Project Outcomes Summary

Benefit to Extrusion Technology

Production cost savings

New sales

$ 30,000/yr.

$200,000/yr.

Benefit to U.S. Economy

Additonal business to domestic vendors $ 56,000/yr.

(capital investments)

Additional jobs created 6

*Figures do not include staff time calculations

11-73
CHRONOLOGY OF SERVICES

Extrusion Technology President, Jim Sharpe, initiates contact

with GBMMP, following referral by staff of ISONet. MM?

project manager David Geschwind participated in a plant tour, made an initial assessment of Extrusion Technology, and

initiated discussion of possible projects to improve business

competitiveness.

Identified need for communications training program for

supervisors. Identified TEA Associates as a resource to conduct project.

Conducted performance benchmarking assessment and

analyzed resultmg benchmarking report.

Carried out supervisor training project. Also, identified critical

productivity issues in CNC machining department and located ValueTech Engineering as a resource for addressing problem.

ValueTech conducted a comprehensive analysis of the CNC

machining department. Identified specific products for tooling

re-design and documented set-up time reduction methods.

Installed Licom CAD/CAM software and provided appropriate

training.

Completed final phases of set-up time reduction project and

submitted final project report.

Began development of project to improve customer

satisfaction and marketing. Selected Diagnostics Plus as

resource to conduct project.

Mailed satisfaction/marketing questionnaires to customers.

Received and analyzed survey responses.

Completed final report and made recommendations. Initiated new product development talks with respondents.
Case Study

GALILEO CORPORATION .

Sturbridge, Massachusetts

MASSACHUSETTS MANUFACTURING

PARTNERSHIP

AT THE BAY STATE SKILLS CORPORATION

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Steven Ellis

JJniversity of Massachusetts Donahue Institute

Amherst, Mass.

11-75

A S E STUDY

Galileo Corporation

Galileo Corporation develops, manufactures, and

markets glass fiber and electro-optic components,

assemblies, and systems. Galileo, located in

Sturbridge, Massachusetts, employs 200 people

and operates four diverse business divisions in one

manufacturing location. According to Galileo's

president, William Hanley, the company is a

defense conversion success story, having made a 95 percent conversion from defense to commercial

markets over the last 10 years. After a difficult

period of adjustment, Galileo has returned to

profitability, posting a 13 percent growth in sales

in 1995. Over 20 percent of its $34 million in sales

in 1995 were to foreign markets.

Founded in 1959, Galileo was one of the first independent manufacturers of fiber optics. The

company's four business divisions include office

products, scientific detector products, medical

products, and remote sensing products. With the

assistance of Massachusetts Manufacturing

Partnership (MMP), Galileo has made great strides

in further increasing its profitability and market

potential. At no loss for words regarding Galileo's

experience with MMP, Mr. Hanley refers to the program as "the best idea the U.S. Commerce

Department has ever had." Assisted by Paul

Cotnoir, director of MMP's Central Massachusetts

affiliate office, Galileo has experienced increased

productivity and sales, while competing against

world-class competition from Europe and Asia.

Making the Connection: Project

Development

Mr. Hanley became aware of MMP in its early

formation, through contacts at Worcester

Polytechnical Institute (WPI). He was excited by

the prospect of a resource that would bring an

outside perspective and engineering and other

expertise to small manufacturers in Central Massachusetts. He contacted the local MMP

affiliate office immediately after it opened. This

call led to an initial meeting between Messrs. Cotnoir and Hanley and other key Galileo staff in

July 1994.

A series of meetings followed this initial contact,

including a plant tour, a comprehensive business

assessment, and a focus group with Galileo management. The end product of these meetings was a prioritized list of opportunities for

productive collaboration between MMP and

Galileo. The highest priority was given to projects

that would result in the most immediate and

dramatic results at the lowest cost. The best

opportunities for this type of quick success were in

Galileo's most profitable divisions: office products

and scientific detector products.

Project Focus: Automated Inspection of

iVIicro-Channei Plates

The Problem. The scientific detector products

division faced a challenge that, if met successfully,

would result in enormous gains to the company.

11-77
which was pursuing a contract with a Netherlands-based producer of robotic eyes.

Historically, Galileo had supplied imageintensification components for use in military

night vision equipment, technology similar to that

used in robotic eyes. The problem was Galileo's

inability to meet the inspection and quality

standards on which the contract depended. After

defining possible solutions in meetings with Mr. Hanley and senior engineer Tom Barth, Mr.

Cotnoir was confident that he could find a

consulting resource to meet this challenge.

The Assistance. Mr. Cotnoir's search process led him to William Johnson of BOA Consulting in

Worcester. Mr. Johnson, a WPI graduate student in manufacturing engineering, had the specific

computer programming skills and background

that the project required. Following Galileo's

approval, he was contracted to write an image

processing software program. This program would

enable the quantification of quality test parameters

by a vision inspection system already in place at

Galileo. The software would be compatible with

existing hardware and have the capacity to

generate inspection reports for customers. Over

the course of four weeks, Mr. Johnson developed

the program and designed a user interface.

The Outcome. Mr. Hanley viewed the project as a complete success for Galileo, referring to it as "the

bargain of the century." The cost of developing

this new inspection capacity was $3,250. The

benefit was a $625,000-a-year contract to manufacture image-intensifying micro-channel

plates, which Galileo wrested from a Japanese

competitor. MCP production has already started. Mr. Hanley views MMP as the critical agent in his

company's development of an inspection capability

sufficient to meet the requirements of this new

contract. MMP was instrumental both in

identifying the need and in matching the

appropriate consulting resource to the problem.

Project Focus: Workflow Enhancement

The Problem. MMP identified another

opportunity for a quick-return, high-impact

project in the office products division. Initial

assessments had indicated substantial

opportunities for improvement of workflow and

productivity on the corotron bare wire assembly

(CBWA) line. The CBWA line assembled

components for high-speed copiers for Xerox. Mr.

Cotnoir asked Automation and Information

Planners (AIP), of Worcester, to present its throughput improvement process (TIP) to Galileo. Mr. Cotnoir believed TIP, which was developed by AIP owner and president, Michael Charchaflian,

to be well-suited to the problem. Galileo approved

of AIP's approach and qualifications and

contracted the company to perform a workflow

enhancement project for the CBWA line.

The Assistance. The TIP process began with a

rigorous and comprehensive assessment of workflow within the CBWA manufacturing

process. AIP's assessment consisted of time study

analyses and workflow reviews, followed by

computer simulation of numerous workflow

modification scenarios.

The Outcome. This approach allowed the planners

to generate detailed recommendations for improvements in workflow and provide Galileo

with a clear perspective on the CBWA line's

potential performance and profitability.

11-78
However, after reading the final TIP report, Mr. Hanley and senior quality engineer Rich Emmons

realized they had a decision to make. While

Galileo could implement a number of productivity

improvement suggestions within the CBWA line, they were not confident that the line would ever

achieve profitability sufficient to warrant the

investment. Their final decision was to terminate

this ongoing contract, and divert the company's

resources to the more profitable di-corotron line within the same division.

The value of the decision to close the CBWA line is

difficult to quantify, but its implications are not hard to grasp. Galileo received and acted upon the wealth of objective data provided in the TIP

report. For the first time, it was able to review this

line's profitability potential with comprehensive

information to back up assumptions. As a result,

the company will now focus its resources on

higher-return investments, improving its overall

competitiveness. The information generated during

the workflow analysis was the basis for this informed decision making. Mr. Hanley, pleased

with the rationality of the process, has furthered

his commitment to rational decision making by

hiring an industrial engineer to implement other AIP suggestions.

Project Focus: Vendor Analysis

The Problem. Significantly, another improvement

opportunity was identified during the TIP

assessment project to enhance workflow. Some of

the vendors on whom Galileo depended to manufacture plastic parts and perform finishing

processes, such as painting, were located at great

distances from its plant. This circumstance was

due, in part, to the fact that Galileo had closed another plant in early 1994, consolidating

operations in Sturbridge. Existing vendor

arrangements remained in place, however, and,

until this time, no one had studied these vendors'

performance.

Promptmg this study was the realization that

Galileo was paying high shipping charges and that managers had less awareness of vendor operations,

efficiency, and quality than they would have liked. MMP contracted AIP to conduct an analysis of

these vendors for the CBWA line and for another

office products line that refurbishes di-corotron

wire housings. This analysis was an addendum to

the workflow enhancement project and ran

concurrent with it.

The Assistance. The vendor analysis began with

developing a procedure to examine vendor price,

quality, and processes. Subsequently, AIP made

arrangements to visit vendor plant facilities to examine their operations. Finally, it conducted a

search to identify alternative vendors. Some special

effort was made to identify potential vendors in

the Sturbridge area to minimize shipping charges,

production delays, and other problems that might

be alleviated through face-to-face communications. AIP then documented this customized vendor selection process for

application throughout the company.

The Outcome. The vendor analysis produced

immediate benefits for the company. While

discontinuing the CBWA line meant that no cost

savings were realized there, costs fell dramatically

after the company implemented the planned

11-79
vendor changes on the di-corotron product line. GaHleo's vendor source changes on this Hne have

resulted in higher-quality parts at lower costs, massive reductions in shipping costs, vastly

improved response and delivery performance, and

certified parts mandates. The company now is near enough to its vendors to hold routine meetings and more effectively manage vendor

relations.

What this result means to the bottom line is $500,000 per year in documented savings through

cost reduction, which may well reach $1 million in

a few years (see Table 1). Mr. Hanley fully expects

the new vendor selection process to be implemented across the company. As Mr. Emmons

noted, "We were always too busy firefighting to look into changing vendors. Now we use more

competitive local suppliers who have added 20 to 30 jobs to our local economy." Galileo has also

invested in improving the processes of these

suppliers, purchasing a $200,000 painting system

for use on its orders by one company.

Investment and Results: Understanding

the Benefit of Massachusetts

Manufacturing Partnership Services

MMP's overall impact on Galileo's

competitiveness and business performance is clear

(see Table 1, Project Costs and Outcomes). But, as Mr. Hanley noted, what is important to understand is that MM? addresses two

fundamental areas of concern for small manufacturers that private consultants cannot.

First, it brings in an outside perspective to assess needs within the company. This step is important

because, unlike consultants, MM? has no profit

motive when it approaches companies, and is well- positioned to develop trusting relationships and

provide companies with new insight into their

businesses. The second concern falls out of a common lack of internal resources, which forces small manufacturers either to look for outside

expertise or to "muddle through" with things as they are. According to Mr. Hanley, even when

problems are identified, "The process of resource

selection is so laborious that we often just don't

bother. And you're scared you'll get your pocket

picked, too. This has happened to us." MMP

addresses this concern by locating capable

consultants through an established network of

resources and by managing project contracts to ensure that work is completed to the customer's

satisfaction. This approach minimizes the risk and

timelines associated with outside consultant

selection.

It is MMP's ability to address these fundamental

concerns that makes it a necessary and effective

catalyst for modernization and adoption of best manufacturing practices among small manufacturers. "They helped us see the forest for

the trees," commented Mr. Emmons. "We not only

gained a new perspective, we developed projects to improve. And now, with the success we've had,

improvement and change have become part of our

culture."

11-80
Table 1

Project Costs and Outcomes

Table A

Project Costs

Automated inspection of micro-clnannel plates $3,250

Worl<flow enlnancement $15,000

Vendor analysis $5,000

Total Costs $23,250

Table B

Project Outcomes:

Automated Inspection of MOPS

New micro-channel plates sustainable $625,000/yr.

contract

Table C

Project Outcomes:

Workflow Enhancement

Workflow improvement Hired one industrial One professional

engineer FIE
Table D

Project Outcomes:

Vendor Analysis

Vendor analysis cost reduction sustainable, $500,000/yr.

1 1 lay y 1 vj vv

Vendor analysis capital investment new painting $200,000/yr.

equipment

Vendor analysis new jobs resulting hires 20 PTE

by new

vendors

Table E

Project Outcomes:

Summary

Total direct benefit to Galileo Electro-Optics

$1,125,000/yr.

Increased

taxable sales

(export)

$625,000/yr.

Additional business to domestic

vendors

$200,000/yr.

New jobs created 21
CHRONOLOGY OF SERVICES

1994

July

August

September

October

November

December

Received inquiry from William Hanley, president of Galileo,

regarding MMP services. Arranged initial visit to plant.

Paul Cotnoir conducted plant tour and key staff interviews,

which helped identify possible projects to improve

competitiveness.

Received AIP proposal for workflow improvement project on

the corotron bare wire assembly (CBWA) line.

Received proposal from BOA Consulting for automated

inspection of micro-channel plates (MCPs).

Signed contract and began work on workflow improvement

project. Focused on current performance documentation on CBWA hne.

Signed contract and began work on MCP inspection project.

Focused on user documentation and image manipulation.

Conducted sub-process analysis of CBWA line, analyzed

possible productivity/profitability improvement scenarios

through computer model simulations. Recommended and

accepted plastics vendor analysis project.

Completed MCP inspection project, including image

manipulation capacity and user interface development.

Delivered final report. Completed CBWA WIP project and submitted final report. Conducted plastics vendor analysis. Produced and

implemented new vendor selection methodology on corotron

and di-corotron bare wire assembly lines.

1995

December • Reported a 13 percent growth in sales.

• Reported over 20 percent of $34 million in sales were to foreign markets.

11-83

Case Study

I

I

j

i GLENDALE TECHNOLOGIES CORPORATION

Lisle, Illinois

CHICAGO MANUFACTURING CENTER

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Natalie Davila

Chicago Manufacturing Center

Chicago, III.

I

11-85

A S E STUDY

Glendale Technologies

Corporation

Glendale Technologies Corporation (GTC), was

founded in 1990 by Mr. Lee Lu and a group of

investors to assemble and sell lowcost computer

systems primarily for largevolume purchasers or

for resale in computer stores.

Currently, GTC has a total of 21 full-time employees, four of whom it currently contracts out

to work with other companies on an hourly fee

basis. GTC also has four part-time workers. LS

International (LSI), the retail side of the business,

has three salespeople. Both operations are housed

in a new 10,000-square-foot facility in Lisle,

Illinois, some 20 miles west of Chicago. Sales

figures for 1995 stood at $5.25 million. 1996 sales

are estimated at $7 million.

GTC is in a fiercely competitive business, with

thousands of competitors ranging from the giant

companies like Compaq, Packard Bell, and IBM,

to one- or two-person operations selling strictly on

price. However, by carefully monitoring its

purchases and getting the lowest available prices on parts, GTC is in a fairly strong competitive

position. Using Taiwanese supply sources estabHshed before GTC went into business, the company was able to enter the market and become

an immediately effective competitor.

Rapid Expansion Threatens Company's

Viability

In February 1995, a Chicago Manufacturing

Center (CMC) marketing affiliate visited GTC and met with Mr. Lu. Mr. Lu expressed a strong

interest in having CMC conduct a full assessment

of GTC, because his business was experiencing

serious difficulties. In fact, between the initial

contact and the assessment visit, Mr. Lu was

forced to reduce his staff to 12 full-time and four

part-time employees. Most of these difficulties stemmed from GTC's expansion rate: its unit

costs began to shoot up and reduce the corresponding profit margin. To get costs back

under control, Mr. Lu had already begun the

process of temporarily reducing the scale of his

operation.

Targeted Assistance Areas

CMC spent less than 50 hours with Mr. Lu and his

staff, averaging four hours per month. On April

13, a CMC team headed by George Beattie, a

senior program manager, spent a day in the facility conducting a rigorous assessment of GTC

operations. The team identified three specific areas

for GTC to address to achieve its goal of

increasing sales without reducing profit margin.

Personnel Management. First, GTC's sales department was suffering from a very high

personnel turnover rate. CMC recommended

assessing the management and supervisory skills of

11-87
GTC's sales manager and developing a teambuilding system to improve communications and

interpersonal relationships within GTC's sales

department. The project proposal was delivered to GTC in June 1995, and was a key factor in

causing the sales manager to resign a few weeks

later. Personnel problems thereafter were

significantly reduced.

Shortly afterwards, Albert Wey joined the

organization as a partner, and assumed the role of

general manager—a personnel change accelerated by the sales manager's resignation. This allowed Mr. Lu more time to focus on marketing and sales,

his areas of expertise. Formerly, Mr. Lu had to handle all types of problems that arose in

assembly, sales, marketing, personnel, or other

areas. By hiring a general manager, Mr. Lu was

able to concentrate on GTC's sales growth instead

of being pulled in all directions for crisis control.

Minority Supplier Certification Status. Second,

CMC recommended that GTC boost its sales

potential by reapplying for minority supplier

certification status with various governmental

agencies. GTC had previously applied for

certification, but let the certification expire, and

had not taken advantage of its potential for

generating additional sales. CMC assisted GTC in completing and filing this application with several

local government agencies.

SBA 8(a) Certification. CMC further recommended that GTC apply for and obtain

certification as a Small Business Administration

(SBA) Section 8(a) contractor to permit

negotiation as a sole source supplier for federal procurement. This move was viewed as another

way to generate sales and expand GTC's customer

base. Again, CMC assisted GTC in completing this

application, which was filed in late 1995 and is

still pending.

Sharing ofProduction Schedule Information. The

CMC team made several additional operationsrelated observations, including the level of

disruption in production caused by sales staff

trying to discover the status of particular orders. Although GTC had a software package in the

facility to facilitate its accounting process, it did not have the capacity to help with inventory

control or perform job tracking and costing because the package did not have real-time

capabilities. CMC recommended introducing new

automated scheduling software.

Mr. Wey did not follow this exact prescription, but

did introduce a manual scheduling system, which

fills the same need. He installed a bulletin board to

display the production schedule information this system generated, and located it between the production and sales areas. Thus, when

salespeople need specific order information, they can get it from the board rather than interrupt the assembly process. As a consequence, the assembly

workers no longer have a lot of time taken up

dealing with specific inquiries, but, instead, can

concentrate on assembly and not feel they have to

rush and make up for lost time.

Formalization ofPolicies. Responding to another

CMC recommendation, Mr. Wey also began

formalizing operations and personnel policies by

typing up brief memos on various topics and

circulating them throughout the facility.

Market Development. The CMC team further observed that GTC was not actively working to

diversify and expand its sales base. The company's

main marketing technique was broadcast by fax,

11-88
primarily to existing customers. Mr. Beattie began

to work with Mr. Lu and Mr. Wey on this and

other marketing-related issues. He introduced

GTC to CMC's "Finding Your Next Customer"

program. Through group training sessions and onsite consultation, CMC experts guide management

through the process of developing and

implementing a marketing and sales plan. This

customized approach combines the company's

unique knowledge and experience with the

expertise of marketing professionals to construct a comprehensive and effective sales initiative. GTC

used this program to develop marketing materials

for its booth at the national COMDEX trade show

in June 1996. At the same time, the company is working on a business plan, which it hopes will

result in $100 million in sales within 5 years. This

plan includes expansion into the customized

computer and service areas, primarily through

franchises.

Under this "Finding Your Next Customer"

program, GTC has so far participated in group

training sessions and received 80 hours of on-site

marketing-related assistance.

Outcomes

Since CMC began working with GTC, the company's financial position has improved

significantly through increased sales, reduced scrap and reject rates, and a substantial increase in the

firm's "gross margin," (i.e., the difference between the value of sales and costs).

First, within a few months of filing the application

for minority supplier status, GTC obtained a local government contract worth $500,000 that it would not have received otherwise.

Second, adopting CMC's recommendations to provide easier access to production scheduling

information and to formalize operations and

personnel policies directly contributed to markedly

reduced scrap and rework rates (see Table 1).

Table 1

Glendale Technologies Corporation:

Quality Assurance

1993 1995

Scrap Rate 3.2% 2.4%

Reject Rate 2.0% 1 .5%

The firm's increased sales and reduced costs have

combined to help GTC nearly double its gross margin in a single year— from 9.6 percent of sales

in 1995 to 17.6 percent during 1996. Obviously,

this is a very significant improvement in GTC's

overall financial performance (see Table 2).

Third, from a marketing perspective, Mr. Lu now

devotes most of his time to sales development.

This shift was facilitated in part by CMC's

proposal to assess the Sales Manager position,

which, as noted, both caused the existing sales manager to resign and accelerated hiring of a new

partner/general manager. Since then, Mr. Lu's time

has freed up, which allowed him, with direct CMC

program

11-89
Table 2

Glendale Technologies Corporation: Financial

1992 1993 1994 1995 1996

Sales $4.72 $8.94 $5.90 $5.25 $7.00

Cost of Goods $4.31 $8.02 $5.22 $4.70 $5.77

Gross Margin $0.41 $0.92 $0.68 $0.55 $1.23

support, to develop material for the COMDEX

show. This event generated 3000 business leads of which Mr Lu is targeting the 1000 most

promising for near-term followup. He also is

drafting an ambitious, but systematically

developed, business marketing plan.

As an offshoot of that planning activity, and with

the encouragement of CMC, Mr. Lu is using

CMC's international network to help him pursue

overseas expansion. For example, GTC recently met with trade representatives from Poland and

Finland, and the company subsequently entered

into a contract with the Finnish representatives to

explore business opportunities there.

These factors, in addition to GTC taking a more

active cash management role, have stabilized the company's financial position and put it in a place

where it is poised for growth. CMC also

continues to advise the company and to link it up

with other CMC clients and/or services.

Public Benefits

Full-time employment in the company has

increased from 12 at the time of the CMC

assessment (April, 1995) to 21 in April 1996.

External Factors

Several external factors have contributed to the

success of the GTC/CMC relationship. Mr. Wey

joining the organization has facilitated the implementation of several CMC recommendations.

Also, the phenomenal growth in the computer

industry both nationally and internationally cannot

be ignored. However, due to the fiercely

competitive nature of the computer industry, GTC

would not be in a position to meet this increasing

demand if they were financially unstable and

produced products with high reject rates. In

addition, because the industry is dominated by

major brands, marketing is extremely important.

CMC has assisted GTC to improve in all of these

areas. While it is not possible to know if GTC

would eventually have identified these issues and

started working to resolve them, Mr. Wey himself acknowledges it was hard to "see the forest for the

trees" because the firm was relatively small and

operated in a reactive rather than proactive mode.

CMC played an essential role in providing a broader perspective.

11-90
A Valuable Partnership

Both Mr. Lu and Mr. Wey view their relationship

with CMC as a partnership, where all parties

speak the same language. CMC's extensive experience in the electronics industry has guided

GTC "in the right direction" and helped shorten

its growth time frame. When talking about CMC,

Mr. Wey best describes how the relationship

works in saying that it has helped him translate

theory into more practical, real-world

applications.

11-91
CHRONOLOGY OF SERVICES

1990

1993

1994

February 1995

March 1995

April 1995

May 1995

June 1995

July 1995

October 1995

November 1995

December 1995

February 1996

April 1996

June 1996

• Company founded.

• Sales grow by 90 percent, with inventory being financed

through borrowing

- Employment at GTC peaked at 32 employees.

• Decision to reduce sales volume to assist financial health of company.

- GTC employment fell to 20.

• Herb Russcol contacts Lee Lu to set up an initial visit.

- Glendale Technologies move to new 10,000 square foot

facility.

• Initial visit of Glendale Technologies conducted by Herb

Russcol who presents CMC services to Lee Lu.

- Employment at GTC continues to fall, reaching an historic low of 12 full-time and 4 temporary employees.

• CMC team, led by George Beattie, conducts an assessment

• CMC staff deliver assessment report to Lee Lu, identifying

three particular action items.

• ITA on company restructuring.

- ITA for sales development.

- CMC delivers a proposal to conduct an assessment of the

sales manager position.

• Sales Manager resigns before project accepted.

• Retail operation relocated to GTC facility.

- Albert Wey joins GTC as Vice President of Production.

This frees up Lee Lu, who is then able to devote most of

his time to sales development.

- SBA Section 8(a) Sole Source Contractor Certification

application completed with assistance from CMC staff.

- With assistance from CMC, GTC reapplies for minority

supplier certification with many units of local government.

• Albert Wey begins to introduce formal operational procedures

for GTC.

- GTC begins to receive minority certification.

• GTC signs up for CMC's "Finding Your Next Customer"

program.

• "Finding Your Next Customer" program begins.

• Employment at GTC stands at 21 full-time and 4 temporary

employees.

• With assistance, GTC has a substantial booth at COMDEX

trade show in Chicago.

11-92
Case Study

HAAS-JORDAN CO., INC.-

Lake Erie, Ohio

LAKE ERIE MANUFACTURING EXTENSION

PARTNERSHIP

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Richard L. Hanson

Lake Erie Manufacturing Extension Partnership

Toledo, Ohio

11-93

S E STUDY

Haas-Jordan Co., Inc.

Haas-Jordan Co., one of only seven surviving umbrella companies in the United States (out of about 200 at the turn of the century), is run by

David Waltz. Thomas Waltz, his brother, runs the

F.J. Westcott (Westcott) Company. Both companies

are located in the same building in Toledo, Ohio.

Westcott does all the silk screening for HaasJordan and markets light control products to

professional image makers, along with a number

of other products directed at that market.

Haas-Jordan was created in 1899 as the Hull

Brothers Umbrella Manufacturing Company.

When the Company relocated to Toledo in 1903,

it became the Hull Brothers and Haas Umbrella

Manufacturing Company. The Haas at that time was Cloyd Haas, grandfather of the Waltz

brothers. In 1933, the company became HaasJordan Company and introduced the golf umbrella

to America. In 1959, it was the first to silk screen

club crests on golf umbrellas. Today, 97 years after

its founding, Haas-Jordan is the leading supplier

of quality imprinted umbrellas and related

products to golf clubs, resorts, major PGA

tournaments, golf manufacturers, and

corporations.

Haas-Jordan products are crafted with pride by

American workers in Toledo, Ohio, or built to demanding Haas-Jordan standards in the company's overseas factories. HaasJordan has high

quality standards for materials and workmanship,

which allow it to offer a one-year limited warranty

against defects in materials and workmanship. For example:

• All Haas-Jordan products are inspected,

both during manufacture and immediately

prior to shipment.

• Haas-Jordan's custom-made nylon cover

fabric is 28 percent more densely woven than

the fabric used by competitive brands,

ensuring better water repellency and higher

imprint quality.

• A total of 225 custom colors is available.

• To ensure superior resistance to the damaging effects of wind gust, the frame wire

is 18 percent wider than that in competitors'

frames. The unichrome frames are made of

corrosion-resistant, high-strength, zinc carbon

steel. The fiberglass shafts have an extra thick

wall.

• High-impact, molded plastic components

enhance product value and durability.

• All handles are permanently attached with

epoxy adhesives or carefully countersunk

stainless steel nails.

Haas-Jordan is clearly a company concerned about

quality.

11-95
Technical Assistance Provided

Both David and Tom Waltz have come to trust the

economical, cost-effective assistance provided by

the Lake Erie Manufacturing Extension

Partnership (LEMEP), a division of the Edison

Industrial Systems Center (EISC). EISC is one of

seven State of Ohio supported Thomas Edison

Centers. Haas Jordan and Westcott are located m

the heart of the LEMEP service region.

In December 1994, Jim Matzinger, field engineer

of LEMEP, contacted David Waltz, president of Haas-Jordan, to present LEMEP capabilities and

to get a feel for the business and Mr. Waltz's vision

of Haas-Jordan's future.

Wind Velocity Testing. For more than 6 years, David Waltz had been looking for a reasonably

priced facility to conduct structural testing on a

variety of umbrellas the company produces. Mr.

Matzinger went to work on the problem, and, in February 1995, presented a proposal to test samples at the University of Toledo Department of Mechanical Engineering.

Approximately 20-30 umbrellas could be tested

daily for wind velocity and wind incident angle

while being videotaped and observed by HaasJordan personnel. This type of product testing had

never before been conducted in the facility. However, with minor modifications to the tunnel,

Haas-Jordan was able to conduct critical windvelocity testing on several dozen umbrellas over a two-day period. The testing represented a savings of $15,000—$18,000 for Haas-Jordan, a direct

result of LEMEP providing access to the University of Toledo facility at a rate much lower than the

cost of renting NASA's wind tunnel in Cleveland,

Ohio, at $10,000 a day. In addition, several

months of waiting for an available wind tunnel

facility were eliminated. Haas-Jordan gained

valuable information to help develop new product

growth opportunities and thus enhance its market

share. It considered the project to be a complete

success.

Specially Designed Hoop Assembly. Mr. Matzinger responded to another problem in March 1995. Development work performed by

Westcott, which does all the silk screening for Haas-Jordan, had demonstrated the feasibility of

using a specially designed hoop assembly to firmly

press and hold fabric during silk-screening

operation. Its successful implementation would

allow the silk-screen design to pass over a seam. In

the past, large designs were silk screened on each

panel and then matched by the seamstress—

a

time-consuming operation prone to rework. Thus, most silk-screen designs were limited to the size of one of the umbrella's eight panels. Interestingly, in

times past, umbrellas with significantly more than

eight panels were a status symbol.

Mr. Matzinger used his manufacturing experience

to bring the involved personnel together—from the

vice president of manufacturing to the machine

operator—for a brainstorming session. The

meeting took place on the shop floor and proved

to be highly productive in identifying what was

needed to make the concept work. Mr. Matzinger then tapped his tool and die

resources to translate the concepts into machine

modification and fixture sketches. Mr. Matzinger

evaluated quotes received from two companies

and awarded the project to the more cost-effective

one.

11-96
The installation went smoothly and, after a short

start-up, one operator was running the machine,

producing quality products and generating cost

savings from operations that were 25 percent more

efficient. Having the ability to silk screen over a seam allowed Haas-Jordan to accommodate larger

logos, and gave the combined companies a

competitive advantage. They were able to

significantly increase their volume in the custom

logo market niche.

Adhesive Interface Development. In December

1995, Mr. Matzinger worked on an adhesive

interface development project for Westcott. The

problem was associated with finding an adhesive system for bonding aluminum tips to the four

flexible steel rods used to support a reflective

fabric canopy. The steel rods are approximately

3/16 inches in diameter, 3 feet long, and powdercoated to replicate aluminum. Aluminum tips are

used at both ends of the rods to prevent wear and

to provide a stop for a supporting ring that

contains a light source. The joint between the steel

rods and the aluminum tips is subject to shear

loading conditions and elevated temperatures as

high as 300" F for prolonged periods. The project

objective was focused on finding an adhesive

system and developing application procedures to

satisfy all constraints.

When Tom Waltz funded the proposal Mr.

Matzinger produced. Lake Erie MEP turned to

another Thomas Edison Center—the Edison

Welding Institute (EWI)— to solve the problem.

EWI has world-class experience in joining all

types of materials. EWI assistance helped to

identify the appropriate adhesive and the proper

application process to render another Westcott problem solved in a cost-effective manner.

QuickView Plus Benchmarking. In January 1996, Mr. Matzinger and Daniel Pullman, Haas-Jordan

vice president of manufacturing, discussed the

preparations Mr. Pullman was making for

presentation of the annual plan. Mr. Matzinger

recommended that he benchmark his business and,

together, they completed a QuickView Plus Benchmarking funded through LEMEP. The

resulting profile report benchmarked Haas-Jordan

against established national and international

standards and offered diagnostic guidance and

recommendations useful in outlining a continuous

improvement plan for the company.

At LEMEP, the field engineer has the responsibility

to facilitate the QuickView evaluation and provide

value-added input based on an analysis of the QuickView report and the knowledge gained in a

detailed plant tour. Mr. Matzinger presented his

findings in time to support Mr. Pullman's planning

cycle. One key recommendation was to use an

industrial engineer to set standards for new or changed operations, many of which stemmed from

the management team's continuous improvement

efforts. The workers affected by these changed

operations receive an average wage until a

standard is set.

Prototype Development of Umbrella Components.

In a meeting on February 28, 1996, with HaasJordan's president, Mr. Matzinger learned of the company's wish to develop prototypes of a new,

reinforced umbrella tip cup and sleeve molded in one piece. The current design requires two

11-97
moldings with subsequent assembly. It was felt

that significant savings and improved performance

could be realized with a one-piece design

incorporating peripheral reinforcing ribs. David

Waltz requested a proposal.

Following discussion with Dick Hanson, Lake Erie MEP operations manager, Mr. Matzinger visited a Toledo private industry resource developed by

Lake Erie MEP as a prototype operation. David

Waltz funded the project, now in phase one, where

a limited number of components are in prototype

design and production. Phase two will involve a

decision to quote and fund the production tooling.

Phase one has been expanded to devise a prototype of a plastic, simulated-wooden handle.

This project reflects not only the owners' cost

consciousness, but their commitment to quality, as

the wooden handle tends to deteriorate with time.

Outcomes

All of the projects that David and Thomas Waltz

have undertaken with LEMEP's Mr. Matzinger

have had or will have a favorable impact on the growth of both companies.

The large umbrella portion of total sales has

increased significantly through the implementation

of these projects.

Company officials attributed about $250,000 of

the total sales increase to LEMEP assistance.

growth while improving productivity. One

operator is now running the operation, which is 25 percent more efficient. If $25,000 per year is

the estimated cost of a full-time employee, then the annual savings is $8,000 in productivity

improvement (i.e., $25,000/.75=$33,000 versus

the new $25,000 cost or an $8,000 in savings).

The prototype assistance was simply cost-effective

technical assistance.

Additional benefits include cost savings related to wind-tunnel usage, introduction of the margin

hoop lift frame system, adhesive interface improvements, and prototype development of new

umbrella parts.

Benefits from these Lake Erie MEP projects are summarized in Table 1.

Public Benefits

The public benefits are basic: 55 people employed

in the inner city portion of Toledo—an area hit hard by the exodus of several Fortune 500

companies. The hire of at least five employees is

associated with the Lake Erie MEP projects. The

umbrella market is a competitive market, subject

to external market conditions on the manufacturing side and the availability of

low-cost labor and materials in Pacific Rim

countries. Haas-Jordan and Westcott have

been able to maintain employment levels

Implementing the new business practices in the

silk-screening operations helped facilitate this

11-98
Table 1

Summary of LEMEP-related Cost Savings

YEAR SALES EMPLOYEES SALES/EMPLOYEE ANNUAL COST SAVINGS

1993 $5.5 MM 48 $114,583

1995 $6.3 MM 55 $114,583 $10,000 wind tunnel

testing savings

1995 $8,000 productivity improvement

related to silk screening of large umbrella operation

1995 $20,000 incremental

contribution of margin hoop lift frame system for large logos

1996 $6,000 projected economic

impact for adhesive

interface development

$1 ,200 projected economic

impact for prototype development of tip cup and sleeve

1996 $45,200 is realized annual

benefit

1996 $12,686 is LEMEP income

from all projects

1996 $3.56 is Haas-Jordan/

Westcott benefit from every

dollar invested with LEMEP

and their contributions to tiie community of

Toledo, Ohio, by seeking cost and quahty

leadership while recognizing the value of their work force.

Haas-Jordan's Quest for Quality and Its Partnership with LEMEP

David Waltz has a tremendous capacity for change

and innovation, and has acted not only on LEMEP

recommendations but on many of his own

instincts in his quest for higher quality products

and performance. Haas-Jordan's atypical status as

a small company sourcing product in the Far East

while constantly seeking customer input to

continuously improve product lines testifies to his and the firm's ability to change in the interest of

survival.

This quest also helped create the opportunity for Lake Erie MEP to be part of that change. Mr. Waltz is quoted as saying, "I issued a challenge to LEMEP to solve our testing problems and they

responded with a cost-effective, viable solution.

This reinforces to me that knowing the right people

and having an effective network of resources will

get the job done and done right" —clearly the

attitude of a leader expecting to change as part of

growing.

11-99
CHRONOLOGY OF SERVICES

February 21, 1995 • Wind Tunnel Testing—Cost to Haas-Jordan: $3,000.

April 3, 1995 • Automated Hoop Lift Frame System—Cost to HaasJordan: $8,817.

December 8, 1995 • Adhesive Interface Development—Cost to Haas-Jordan: $200.

March 12, 1996 • Prototype Development, Reinforced Umbrella Tip

Cup—Cost to Haas-Jordan: $1,672

January 30, 1996 • QuickView Plus Benchmarking—Cost to Haas-Jordan: $0. — Cover letter of the January 30, 1996, final report — The QuickView Bar chart — The Lake Erie MEP value-added analysis and

recommendations — Vision for Haas-Jordan—a matrix of project

opportunities

11-100
Case Study

ITHACA PERIPHERALS ING.

Ithaca, New York

ALLIANCE FOR MANUFACTURING AND

TECHNOLOGY (AM&T), FORMERLY

UNIVERSITY/INDUSTY PUBUC PARTNERSHIP

FOR ECONOMIC GROWTH (UNIPEG)

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Douglas Welch

Nexus Associates, Inc.

Boston, Mass.

il-101

S E STUDY

Ithaca Peripherals Incorporated

Ithaca Peripherals Incorporated (IP) was started in 1983 by two engineers formerly with NCR. The

company manufactures point-of-sale (POS)

printers used for the printing of receipts and

tickets. IP has four primary product lines that are

sold either as discrete units or as components for

larger POS systems. A total of 85 people are employed by the company, nearly half of whom

are engaged in assembly, stock room, or shipping

operations.

IP's competitors achieve economies of scale through production of large volumes of printers

with standard features. These competitors are able

to meet demand quickly and maintain low prices

for a standard product. The challenge for IP is to

achieve the same economies of scale and

production cycle time while offering customers

customization and product flexibility.

IP is order-driven, with short turnaround times for customized orders. The company is working

toward a just-in-time production scheme.

Production lines at IP are organized with a sub- assembly staging area adjacent to four production

lines. The sub-assembled units and other components for the final assembly are collected in

bin racks at the beginning of the production line. The lines are organized by printer model. Material

costs are the most significant cost element to the company.

Until 1993, nearly 100 percent of the company's

sales were in the United States and Canada.

Since then, a new sales office has been opened in

the United Kingdom, and overseas sales have

increased as a percent of total sales.

Predecessor Conditions

The prevailing environment at Ithaca

Peripherals had been that of a company whose

systems and manufacturing operations had not

kept pace with the firm's overall growth. IP had

spawned several different departments that were

dependent on each other but not fully integrated or operating on the same information.

The key issues identified at IP related to its manufacturing operations. In particular, the company was experiencing a high turnover rate

in temporary employees, high costs associated with warranty returns, and a high rate of "firstpass" inspection failures. These issues appeared

to be linked. Contributing circumstances

included employee compensation below market

averages, frequent use of temporary staff, and a

nonintegrated management information system

(MIS).

Technical Assistance Provided

The assistance IP received through the MEPaffiliated Alliance for Manufacturing and

Technology (AM&T), formerly the University

11-103
Industry Public Partnership for Economic Growth

(UnlPEG) can be categorized into two main

components: assistance associated with obtaining

IP support from New York State's Industrial

Effectiveness Program (lEP), and subsequent

technical assistance provided directly by AM&T.

First, AM&T assisted the company in obtaining an lEP grant to implement a new manufacturing

operations MIS and to enact changes in the production process. (The lEP is a non-MEP

program funded by the former New York State Department of Economic Development, which is now called Empire State Development). This work

was completed by an outside consultant selected by IP. During the project, AM&T acted as broker/

facilitator between the company and the

consultant. In addition, AM&T provided

administrative support with respect to program

management, accounting, and reporting.

AM&T also provided direct services under the MEP, including independently assessing IP's

business environment and identifying the company's additional requirements. The objectives were to provide the company with the tools to monitor and improve its product quality and

manufacturing operations.

Both phases of AM&T's assistance addressed the same basic problem at Ithaca Peripherals: the need to make the transition from a "mom-andpop" shop with non-integrated business

operations to a company with integrated and

interdependent operations.

lEP Assistance. In keeping with the role of New

York State-based MEP regional affiliates, AM&T

provided initial assistance with IP's application for

financing through the lEP program. In addition,

when funds were secured, AM&T provided

project management during the full productivity assessment stage of the lEP. Its role was to assist in managing the consultant—IP relationship and to maintain the project's focus on the objectives

outlined in the assessments.

The consultant selected to implement lEP

improvements was Sigma Consulting of Rochester, N.Y. The work conducted by Sigma Consulting

included two major components: system

improvements, including implementation of a manufacturing-oriented MIS (Fourth ShiftTM) and

manufacturing layout changes.

In the end, Ithaca Peripherals chose not to fully undertake additional work outlined in the lEP

workplan. These tasks included a TQM program

for senior managers and a system to measure

vendor/supplier capability and product

competitiveness. The unused portion of the $50,000 grant was approximately $13,000. A

primary reason that IP opted not to undertake this work was that the company's priorities had

changed since the initial assessment, making

elements of the lEP irrelevant.

Manufacturing Strategy Plan. However, IP did

continue to access the direct services provided

under the MEP. Following completion of the lEP- funded improvements, an AM&T field engineer

led the month-long development of a new

manufacturing strategy for IP. Begun in August

1994, this new plan continued where the lEP

assistance had left off, providing assistance to a new operations director in addressing ongoing

issues concerning manufacturing operations.

*

11-104
The plan focused on operations because that was

where the company needed to develop more

direction and prioritize proposed solutions. The

plan laid out the company's objectives and the

tasks required to achieve each one. Each task was

organized as a discrete service that the company

could purchase.

The plan identified several key areas for attention,

including the following:

• Staying abreast of competition with

respect to price, quality, delivery, and product

features.

• Monitoring main component supplier

arrangements.

• Establishing a process to ensure a smooth flow of communications and to improve IP's facility with data requests,

collection, analysis, and distribution.

• Reviewing the information system being

developed under the lEP grant by Sigma to ensure compatibility of software and

objectives, of the plan and its achievement, of system capability and utilization, and to

evaluate the need for additional training.

• Refining manufacturing processes and

inventory control procedures.

AM&T prepared and administered the manufacturing strategy plan in December 1994. The MEP program provided project overview,

mission definition, and organizational advice. The

plan provided a corporate vision statement, a corporate mission statement, and a list of immediate challenges to the business operations

relative to product quality, delivery, employee

skills, and morale improvement. The services and

tasks performed under the manufacturing plan

included those identified in the table below:

Table 1

Services and Tasks Performed Under the Manufacturing Plan

Manufacturing Plan Item Objective Deliverable

Quality Improvement

(Final Report

delivered 2/17/95)

• Establish time-phased targets. Develop methodology to collect data, perform root cause analysis.

• Solicit in-house and customer

feedback.

• Methodology to collect data, perform root cause analysis,

and assure corrections are made.

Operations Team

Management

(Final Report

delivered 1/30/95)

• Develop set of agreed measures.

• Create methodology to display and

track manufacturing processes.

• Specific measures for manufacturing team: — quality — cost — delivery

Source: AM&T and New York MEP "Manufacturing Strategy Flan" 12/2/94

11-105
Implementation of these tasks took place over the

following six months and was completed during

the third quarter of 1995. In addition to the tasks

in the table above, AM&T assisted with

developing a system for measuring customer

satisfaction. This component grew out of the measurements and quality tasks. IP was

considering a worker training element, but other

priorities and a more stable workforce have

dissuaded it from moving ahead with this task.

Changes in Manufacturing Practice

According to IP representatives, the major project

components outlined above resulted both in improved manufacturing performance with respect

to physical flows and in reduced unit costs and/or

increased unit revenues.

The changes implemented under the lEP were

related primarily to implementation of the "Fourth

Shift" information system software and to changes

in floor organization. The MEP direct technical

service changes primarily related to the development of measurements and a quality

improvement plan.

Fourth ShiftTM Management Information System.

The MIS implemented by Sigma Consulting

created a framework for sharing information

among departments and for distributing

production data to staff and management. Before

its implementation, each department used a

different source of information for its individual

operations. The new information system created an environment where purchasing, sales, and

manufacturing decisions were made using the same set of data. Overall, the system facilitated

better planning throughout the manufacturing

operation.

Floor Reorganization. The floor reorganization

included reversing the production lines, removing

bottlenecks, and making general improvements to material and information flow. The new system

included installation of a rack system with sub- assembled components and other parts organized

in containers on the racks.

Development of Measurements. The development

of measurements focused on the following process

elements:

• Quality—as measured by the first-pass

yield percentage at final test.

• On-time delivery—measured by the

percentage of orders shipped on time.

• Customer satisfaction—based on direct

feedback from customers.

A key element in implementing these measurements was that they be posted within view of all manufacturing employees. To relay this information back to the people who generate it,

large charts are posted in the workshop directly in view of the production area. The charts are updated daily to reflect production output and

quality of the units produced. When problems

emerge, they are immediately visible on the charts.

According to company representatives, the implementation of productivity measures have

resulted in the following process improvements:

• Quicker response to production

problems. Discovery of problems is faster, and

the time from problem discovery to cause

identification is shorter.

11-106
• Improved materials planning. Inventory turnover occurs 4-6 times per year, with fewer

delays from missing components.

• Improved scheduling. Greater visibility of the production process enabled more efficient scheduling and planning, allowing Ithaca

Peripherals to maintain a competitive

turnaround time on orders.

These improvements have led to savings from

reduced warranty and "first-pass" repairs, while

the company maintains its competitive advantage

as a manufacturer of customized printers.

Furthermore, as it grew and the labor cost component increased, the company was able to make more efficient use of its labor force.

Development of Quality Improvement Plan. The

objectives of the quality improvement plan were to

establish the following:

• Interim and long-term quality goals

• A data collection system

• A customer satisfaction system

• Root cause corrective action systems

The system for measuring performance,

established in the first task, provided a basis on

which to set quality standards and measure

performance against them. AM&cT provided the

tools to measure performance and quality and to make continuous improvements by means of a feedback system that addresses problems as they

arise. A new bar coding system is used in

production to code rejected items, representing a move toward real-time identification of problems and their sources. Currently, tracking

occurs just once daily. Bar coding is also used to

track shipments.

Outcomes

Employment

• The use of temporary employees has

decreased, and full-time staff has stabilized

as a result of scheduling changes, software implementation, and improved management

and process control.

• The number of engineers has increased,

reflecting greater emphasis on R&D.

• The overall labor content in the manufacturing process is down as a result of more outsourcing. The goal is to have all vendors and suppliers within a 100-mile

radius. Typical outsourced processes are

cable manufacturing and board assembly.

• In 3 years, the number of full-time employees has grown to 20.

Production

• The company has maintained product

reliability and quality.

• Improved materials planning has led to four

to six inventory turns per year. Better

materials planning and better forecasting,

using real-time information,

also has resulted.

11-107
• The company has expanded model types and • This assistance has helped IP develop a unique

offered customized features without capacity relative to its competition: IP is able compromising turnaround time or quality. to fill orders for highly customized printers in

a comparable time to their competitors who

• The first-pass yield rate has increased through produce standard printers m high volume,

reorganization and new quality control

procedures. The Model 50—the most popular • Estimated savings from improved first-pass

model—had a 92 percent average first-pass yield is approximately one employee, or

yield in September 1994, improving to a 95- $12,000 annually. Also, production and

96 percent average yield by October 1995. efficiency increases have resulted in additional

savings yet to be calculated.

• There have been fewer warranty returns. (See

Table 2).

Business Growth

• Business has grown steadily for Ithaca

Peripherals over the past 5 years. While it is important to note that the market for POS

printers grew during the 5-year period, IP

representatives attribute a portion of the company's sales growth to the assistance

received through j\M&T.

The company estimates the total savings they

experienced as a direct result of UnlPEG

assistance at $30,000 in the first year

alone. They believe the levels of savings will

increase in subsequent years as new

production systems are refined and all related feedback loops stabilize.

Table 2

Warranty Return Rate

1993 1994 1995

Model A 50% 40% 5%

Model B 2.75% 2.65% 1 .50%

Source: IP data

11-108
In addition to the efforts discussed above, a new

operations manager was hired in 1994, partly on

lEP recommendations. The agenda of the new

operations manager included the following issues:

• Mistake-proofing assembly operations

• Quick change-over and pre-setup

• Standardized bench areas

The perceived benefit of AM&T intervention,

from the operation manager's perspective, was its

role as facilitator and ally during the period of change and new systems implementation. AM&T

introduced new ideas and identified ways to improve operations. In addition, AM&T

supported changes that the operation manager

recommended to senior management.

Public Benefits

The assistance received through the MEP program

strengthened the company and reinforced its

competitiveness, helping it maintain a stable

workforce. Although it has not hired many new

employees, there has been a small increase in the more skilled and better-paying engineering

positions.

Competing Explanations

Improved performance and gains in market share made by Ithaca Peripherals are due in part to

overall industry growth and company expansion

overseas during the period. However, IP's ability to

enter new markets and maintain market share has been strengthened by MEP services.

11-109
CHRONOLOGY OF SERVICES

January 1993 -

October 1995

AM&T Assistance for lEP Application:

• Provided administrative and application support in making an

initial assessment of the company and developing a list of

consultants.

• Identified company needs and helped the company obtain IE?

funding to finance the changes required.

• Completed the lEP application process.

April 1993 -

October 1995

AM6cT Project Management Assistance:

• MIS design and implementation completed by Sigma

Consulting.

• Project management facilitated consultant-client relationship

and maintained focus on the company's priorities managed by

AM&T.

August 1994 -

October 1995

AM&T Direct Service:

• Identified new and remaining company needs.

• Presented a plan including an estimate of costs.

September 2, 1994 AM&T Assessment Report:

• Assessed the work done under the lEP program.

• Identified and prioritized the company's remaining needs.

November 14,

1994

Meetings with new Operations Manager:

• Established the company's needs in manufacturing process.

December 2, 1994 Manufacturing Strategy Plan:

• Developed a strategy for the company to achieve its

manufacturing objectives.

• Outlined discrete tasks to be undertaken and assessed by the company in order of priority.

January 1, 1995 -

January 30, 1995

Manufacturing Measurements:

• Introduced a system to measure and track IP manufacturing

processes.

• Identified uses of the resulting data to continuously improve

the system.

11-110
January 1995 - Quality Improvement Plan: February 17, 1995 • Provided tools to collect and use data and feed data back into

the system to create an environment of "continuous

improvement."

• Changed manufacturing and management mentality.

March 1995 - April Customer Satisfaction Measurement: 1995 • Worked with sales to identify areas where manufacturing could

improve.

• Completed repcfrt in April 1995.

11-111

Case Study

KD DIDS, INC.

Bronx, New York

INDUSTRIAL TECHNOLOGY ASSISTANCE

CORPORATION

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Claire Brownstein

Industrial Technology Assistance Corporation (ITAC)

New York, N.Y.

and

Douglas Welch

Nexus Associates, Inc.

Belmont, Mass.

li-113

S E STUDY

KD dids. Inc.

KD dids is a high-quality dancewear

manufacturing company with 40 employees in Mott Haven, a neighborhood in the South Bronx

of New York City. The company is located in an

area targeted for economic development by both

New York State and the Federal Empowerment

Zone Program. KD dids has also received

attention as a promising minority-owned

company. For example, a New York Times article about the manufacturer was published in 1991.'

The company's presidents, David Lee and Trish Kaye, were professional dancers before starting the company. They became interested in knitting highquality dancewear and started the company in 1980 in Oakland, California. In 1983, they moved

the company first to Manhattan, and then, to take advantage of lower rents, the South Bronx,

Initially, the company occupied the current office

space for all of its operations, but eventually

expanded deep into the building. KD dids remains

a single plant operation but now occupies 12,000

square feet of fourth floor space.

Since its beginnings, KD dids has produced highquality, "full-fashioned" knitwear.- This line of products has been quite successful. Recently, the company has also opened a line of cut-and-sew

lycra dancewear that now accounts for 6-7 percent

of sales.

KD dids has grown substantially since its origins.

Growth was particularly strong during the early

1990's, when sales more than doubled. Its list of purchasers includes 500 retailers throughout the world, with a large concentration in New York

and California. Approximately 20 percent of the company's sales are exported to foreign countries,

including Europe and Japan. In 1990, the manufacturer employed 14 people; by 1995, it had

40 employees. Almost all its employees either

currently reside or previously resided within a 10-

block radius of the plant. All employees are crosstrained and new hires go through a 6-month

training program. Employee turnover is extremely

low, and employees are treated as a valuable and

integral part of the company.

While KD dids' early customers were exclusively

dancers, the company has gradually moved into non-professional markets as well, including

aerobic fitness clothing. Its major competitors are

large, high-volume dancewear producers.

Teaming Up With ITAC

A field engineer from the Industrial Technology

Assistance Corporation (ITAC) first visited KD

dids m December 1990. While ITAC has had

ongoing contact with the company since that time,

two projects stand out in terms of their tangible

benefits to the company: assistance in accessing

financing in 1992 and a productivity assessment and improvement project that began in 1994. The

project was partially funded by a grant from the New York State Industrial Effectiveness Program

(lEP). (The lEP is a non-MEP program funded by

11-115
the former New York State Department of Economic Development, which is now called Empire State Development).

Technical Assistance Provided

As is true of approximately 95 percent of its company relationships, ITAC initiates outreach

and conducts informal assessments to identify

opportunities for operational and productivity

improvements. ITAC and manufacturers then work together to solve problems, scope out

projects, and identify consultants to deliver the

services. ITAC continues to provide guidance to

the firm as well as to monitor the progress of all

projects.

In the case of KD dids, ITAC provided assistance

in two general areas: access to financing and

productivity improvement.

Access to Financing. In 1991, KD dids was

experiencing severe capacity constraints. A typical

order took approximately 14 weeks to fill. The

equipment consisted of several small, hand-held

knitting machines and only one large,

computerized knitting machine. Sales were going

well, but back-orders were mounting. The

company clearly required more productive

capacity to meet the demand for its machineknitted products. Unfortunately, the company did

not have ready access to capital for several

reasons: it had no previous credit history; most

lenders had no confidence in the company; and it

lacked knowledge of capital market resources. KD

dids did manage to buy its first computercontrolled knitting machine with an $80,000 loan from a financing company. The loan terms, however, were "unfavorable," with a short lease and high interest.

In 1992, ITAC field engineer Phil Massaro was

working closely with a large neighborhood-specific

economic development agency, SOBRO, the South

Bronx Overall Economic Development

Corporation. Together, ITAC and SOBRO

produced a targeted mailing to South Bronx

businesses describing both agencies' resources. David Lee responded to the mailing and contacted

Phil Massaro. Massaro recalled Mr. Lee saying he was "at his wit's end and not getting help

anywhere." To raise capital, he was considering

selling equity in the company—a premature step

that might not have been advantageous to his company.

After assessing the key problems KD dids was

experiencing, Phil Massaro was convinced that

assisting the firm in obtaining financing for new

equipment would help correct its severe backorder situation. Mr. Massaro introduced KD dids

to Nancy Lasher from SOBRO. Although SOBRO

had a service history with the company, previous

interactions had been informal. KD dids'

President, David Lee, said he would not have

pursued SOBRO without ITAC's involvement. Ms.

Lasher approached some 10 banks on behalf of KD dids before finding a receptive ear at Chase

Community Development Bank, which provided

the company with a $100,000 loan. The terms were much more liberal, with lower interest and no money down. The loan enabled KD dids to purchase a new [$80,000] computer-controlled,

full-fashion knitting machine and much-needed,

high-quality finishing equipment.

11-1 16
Productivity Improvement Project. In 1994, ITAC

suggested that KD dids stood to greatly benefit from a comprehensive improvement project. To

help defray the costs, ITAC helped the company

obtain a New York State Industrial Effectiveness Program (lEP) grant, which it received in November 1994. ITAC assisted KD dids in

selecting a private consultant, Tom Myers

Associates, to implement the project. Mr. Myers

conducted the initial productivity assessment and

recommended the following changes:

• Improved productivity measurement

• Shop layout changes to accommodate a new cut-and-sew operation

• The purchase of four new knitting

machines

• The hiring of a sales representative, a

production manager, and a maintenance

worker

• Expansion of "real world" software for

accounting and production purposes

• Improved invoicing system linked to job

batching

• Reassignment of two workers to

improve product quality inspection

Changes in Practice

The ITAC-recommended consultant subsequently

worked with KD dids to expand and diversify the

firm's production capacity, reduce delivery time,

and significantly improve overall manufacturing

efficiency

New Cut-and-Setv Operation. While KD dids

continues to primarily produce knitwear, it is also

developing a new cut-and-sew operation. This new

operation, together with increased knitting

operations, required that the company expand into

adjacent space in the building and develop a new

shop layout. David Lee observes that product flow

patterns in the shop had been "a big problem."

He also feels that without ITAC's help in linking

the company with experts to tackle these problems, KD dids would not have been able to expand its business in this way.

The cut-and-sew operations are continuing to

evolve. KD dids has begun to produce some

unique new dancewear that combines fullfashioned knitted and cut pieces in the same

garment. The ability to combine these operation

gives the firm a decisive competitive advantage

over most competitors, but has complicated

product flow through the shop. KD dids is meeting

these production challenges with the assistance of ITAC and the consultant. The potential for

increased sales in this area is considerable.

Finally, while knitting work at KD dids historically

has been to fulfill current orders, the cut-and-sew

operation creates a need for increased inventory.

The consultant has assisted the company in

addressing new inventory issues. As a result, KD

dids is undertaking layout changes in both existing

and new shop space. The consultant is working on

completing a computer assisted design (CAD)

layout plans and will be assisting in their

implementation. These changes involve

substantial new investment by the company.

il-117
Hiring of Sales Representative. As recommended,

a sales representative with expertise in both the

fashion and bodywear industries started working

for KD dids full time in January 1996. Both the company's owners agree that hiring a sales

representative will significantly help their

competitive position. Most of KD dids larger

competitors have a nationwide sales force.

New Software Packages. Previously, KD dids used

"a hodgepodge of different word processing

packages with no consistent tracking of

production." The consultant is writing new

software to support the production process. The

package will track work from initial order to final

shipment. Real World^"^ software, formerly used

for accounts receivable/payable, is being expanded

for use in other accounting areas.

Improved Productivity Measurements. KD dids

has improved its productivity measurements

through the following means:

• Implementing productivity measures

such as "items produced per labor hour"

• Linking measurement to a new

computer system

• Using the new system to identify and

resolve bottlenecks in production

• Implementing single-entry accounting

Improved Invoicing System Linked to Job

Batching. The company has revised its batching

procedures. Batches are usually processed to equal one day's production for tracking ease. Each batch

involves many jobs, each of which has a simple job

ticket generated by the computer.

Outcomes

The business benefits to the firm associated with

ITAC assistance

Doubled Sales. While demand for KD dids' products was high before ITAC became involved,

the company was having a difficult time meeting

it. The initial loan doubled KD dids' productive

capacity, which, in turn, permitted the company to

privately lease two more machines. Two years

later, in the summer of 1994, the company

privately financed four more machines, as capacity

has once again doubled.

Thus, without this initial loan and the series of

capacity expansions that loan ultimately enabled,

KD dids would not have been able to meet growing demand. Instead, as the following chart

illustrates, KD dids was able to double its sales during the period of ITAC involvement (1991-

1995), and, further, projects record sales of $1.5

million in 1996.

Decreased Order Time. Order turnaround time was a fundamental problem for KD dids.

Apparently, the company was known not only for

the high quality of its products, but also for the

long delays in delivery. David Lee was aware of

this problem and the public's perception, and

knew that his company had to restore credibility

in this area. Changes resulting from ITAC's

11-1 18
intervention have brought delivery times under

control. Order time has decreased from about 14 weeks in 1993 to approximately 3 to 4 weeks

today, in 1996. KD dids Annual Sales

1500000

1200000

1000000

800000

$ 600000

400000

200000

0

year

1993 figure estimated from 3rd quarter performance

1995 figure from New York MEP survey 1996 figure is projected

The company enjoyed some significant additional,

though less tangible, benefits from its improvement program during an unexpectedly

difficult 1995 when both its sales and profits fell. A number of factors contributed to these

difficulties, including the failure of two anticipated

contracts with high-end specialty department

stores to materialize; release by several major

dancewear brands lines very similar to KD dids;

the loss of the firm's traditional sources of yarn

supplies; and sales decline and product

overstocking of such magnitudes that caused many

small retailers to have trouble "keeping their heads

above water."

Further complicating the situation was KD dids

lack of a sales force to combat the competition,

and the need to invest substantial sums to

implement the new layout and other productivity

improvements.

In reflecting on the situation, David Lee commented that, in 1995, KD dids was in a

stronger position to overcome these liabilities than

it would have been if the improvements had not been implemented. The company's increased

efficiency and new cut-and-sew products proved

two important elements of the firm's efforts to respond to this market situation. This successful

response has brought sales "back to the levels they

should be" —back, in fact, to record levels.

Of further assistance during this difficult period was continuing, informal consultation with ITAC.

David Lee, the company's president, noted: "The

ITAC consultant was there for us in tough times and gave us a lot of advice."

KD dids Opens Its Own Retail Store. Finally, in

1995, KD dids opened its first downtown

Manhattan store to foster customer loyalty, promote its new line of active wear, conduct test

marketing, and maintain a "presence." It is also planning to revitalize its mail-order business to sell

directly to customers in areas presently not served by retailers who stock bodywear and dancewear.

Public Benefits

Hiring of 26 Additional Employees. Most of the new employees hired over the years are from the

south Bronx neighborhood in which the company

is located. Mr. Lee indicated that most of his employees reside within a 10-block radius of the

plant and that many walk to work. KD dids has

therefore created jobs in an economically

11-1 19
depressed area. The majority of its employees are

ethnic minorities and most are women.

Finally, KD dids has worked hard to support its

employees. It has never laid off any employees, some of whom have been allowed short leaves of absence to tend to family matters. They were able

to do so because their co-workers had been crosstrained to perform different manufacturing

operations.

Additional Tax Revenues from Increased Sales. Growth at KD dids has increased corporate and

personal state and federal tax bases. While it is not

feasible to quantify the impact of ITAC's work

with KD dids on these tax bases, an impact clearly

exists.

Competing Explanations

Competing explanations of the benefits attributed

to ITAC are possible, but do not necessarily

detract from the benefits described above. First, ITAC was one of two players involved in assisting

the company in accessing financing. The second

organization involved was SOBRO. While it is

clear that both organizations cooperatively

worked to access the funding, it is difficult to

conclusively calculate the benefits derived from

one of the organizations alone. However, it is ITAC's opinion that the combined efforts of both

organizations enabled the company to obtain

financing. ITAC believes that its ability to understand the technology involved and to communicate the potential impact of the new

machines convinced SOBRO to pursue financing

for KD dids. It is evident that a causal relationship

existed between ITAC's intervention and KD dids'

access to financing.

In addition, KD dids' increased sales were

principally a result of having a strong product

with strong market demand. ITAC's assistance enabled the company to better meet this demand.

Sales are linked to the firm's ability to deliver goods on time. Without increased capacity and

better delivery times, KD dids would not have

been able to meet customer demand, which might

have caused a decrease in sales. Additionally, the

positive impact of combining full-fashioned

knitting with cut-and-sew operations would not have been realized without the assistance the company received.

Loolcing Bacl(

David Lee, in looking back on his interaction with

ITAC, stated: "If we had to do things all over

again, we would do it exactly the same

way.. ..ITAC provided us with invaluable assistance and access to resources" which " helped us move

from being a 'mom-and-pop' operation to a

streamlined manufacturing business. . . We have

become more growth-oriented."

Moreover, Co-President Trish Kaye adds: "ITAC

has given us access not only to funding and

technical resources, but their expertise has expanded our viewpoint."

From the ITAC perspective, field engineer Phil Massaro noted that the key to successful work

with KD dids had been the company's openness to new ideas and progressive approach to doing

business. This attitude had permitted ITAC "...to

help a small company that had a terrific product

but didn't have the know-how necessary to

successfully expand its business."

11-120
CHRONOLOGY OF SERVICES

early 1980's

December 1990

1991

1992

1992

1993

1994

1995

January 1996

1996

• KD dids is founded by Trish Kaye and David Lee. Company

moves to Mon Haven, South Bronx, NY.

• ITAC field engineer first visits company.

• KD dids experiences severe capacity constraints and can not

obtain favorable financing for new equipment.

• ITAC and SOBRO assist KD dids obtain $100,000 for one new

knitting machine and finishing equipment.

• KD dids is able to privately finance the leasing of two more

knitting machines.

• Sales continue to increase but KD dids is back ordering

customers. ITAC recommends comprehensive productivity

improvements.

• ITAC assists KD dids to scope work, select private consultant and obtain lEP grant. Company-wide assessment is conducted by Tom Meyers Associates. KD dids purchases

four additional knitting machines. Capacity has quadrupled

since 1991.

• KD dids begins to implement productivity improvements

including, new shop layout to accommodate new cut-and-sew

operation, upgraded computer hardware and software

invoicing and job batching. Order turnaround time has

decreased from 14 weeks (in 1993) to 3-4 weeks (in 1995).

KD dids open its own retail store in lower Manhattan.

• KD dids hires new sales representative.

• ITAC continues to provide guidance and access to technical

expertise and modernization resources to KD dids. KD dids

continues to invest in its workforce, productivity improvements

and growth.

i

11-121
Endnotes

"Growth Amid Blight: Uneasy Worlds Coexist," New York Times, Metro Section, November 7, 1991.

"Full-Fashion" knitwear involves no cutting of fabric in its production, resulting in smaller, stronger seams that are ideal for dancewear.
Case Study

KINTZ PLASTICS, INC.

Howes, New York

CENTER FOR ECONOMIC GROWTH

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Nexus Associates, Inc.

Belmont, Mass.

and

Center for Economic Growth (CEG)

Albany, N.Y.

11-123

S E STUDY

Kintz Plastics, Inc.

Kintz Plastics is a thermoforming manufacturer of

large plastic components in rural New York State.

It produces covers and cases for large machines,

including medical devices, components of large

products such as train cars and electronic

appliances, and specialty products such as an

aroma-therapy spa. Job orders are typically of low

to moderate volume, that is, in the hundreds or thousands.

The company's primary manufacturing processes

are plastic thermoforming and computernumerically controlled (CNC) machining. Because

of its isolated location, however, the company

undertakes many additional operations that might

otherwise be contracted out. These include aluminum mold development and product

assembly, painting, and decal work.

The company was established in 1976 and has

since grown in both size and stature. Kintz Plastics

is the only heavy- gauge thermoforming

manufacturer in the United States with ISO-9000

certification.

Mr. Kintz is the incoming president of the Society

of Plastic Industries Thermoforming Institute. Over the past four years, Kintz has earned the

distinction of being one of the top companies in

the industry. It recently opened a second small

manufacturing facility in Florida, where many of

its buyers are located.

Kintz and the New York Manufacturing

Extension Partnership

Wynn Kintz first made contact with the New York

industrial extension program in the early 1980's

near the inception of manufacturing extension

services in New York. The company has maintained connections with the state extension

service throughout the program's subsequent

evolution, including its progressively fuller (and now full) affiliation with the national Manufacturing Extension Partnership (MEP)

program. Ongoing program support to Kintz,

including referrals and problem solving, has been

provided over the years by various field engineers.

On his part, Mr. Kintz has provided leadership

and support to the program. Among his

contributions is service on the Board of Directors

of the Center for Economic Growth (CEG), one of New York State's current MEP affiliates. He also

has helped nurture a process of relationshipbuilding among a loose consortium of companies

and public agencies.

Technical Assistance Services

Four primary services were provided to Kintz

Plastics through New York MEP and its

predecessors, as described below.

MIS and CAD/CAM Project. In 1990, Kintz

received its first direct exposure to MEP assistance

in conjunction with a project to develop a new

11-125
job-tracking management information system

(MIS) for purchasing, inventory control, job

ticlceting and routing known as SYMIX. The New

England Manufacturing Technology Center (NEMTC), the first MEP-funded New York State

organization, provided project management

assistance to Kintz in operationalizing this new

capability. The system enabled major changes in

the company's purchasing and manufacturing

practices.

In conjunction with this MIS effort, NEMTC also demonstrated to Kintz a package for advanced

computer-assisted design and manufacturing

(CAD/CAM). Previously, the company had made

aluminum thermoform molds through manual

programming of cutting tools. This was a time- consuming process that required a number of

skilled designers. NEMTC's demonstration gave Mr. Kintz his first "hands-on" exposure to the technology—^an aspect of the program Mr. Kintz

appreciated. He soon adopted the technology for

his own operations.

Floor Plan Design. A new shop-floor layout and

design was the first project performed directly for

Kintz Plastics by CEG. In 1994, Kintz Plastics was

preparing to expand its operations into a 9000

square-foot extension. It planned to establish a new work cell in the space for the production of

large molded products, but needed assistance

designing the layout for maximum efficiency. CEG

located expert design help for the company

through the Hudson Valley Community College,

which designed the new layout for a cost of

$2,200.

Technical Assistance with New Product Mold.

During the period that CEG was assisting Kintz

Plastics with the new workspace layout plan, an

unusual problem emerged. A new customer asked

Kintz Plastics to bid on two new products for which no exact specifications existed. The parts were single and double versions of a mount for high-performance automobile gauges for after- market sales in Japan. With only a rough

composite model that had no flat edges to

reference, the design was particularly difficult to

render. Kintz Plastics did not own the laser measurement equipment necessary to render exact

design specifications to machine the molds.

The CEG field engineer located the resources

necessary in a former New York MEP client company elsewhere in the state. After making the

necessary arrangements, he took the models to the

other company and used its machine for a nominal

fee. Overcoming difficulties in measuring the

peculiar part, the engineer returned digital models

of both parts to Kintz Plastics just four business days after receiving them.

With the quick response of CEG, Kintz Plastics was able to return a bid for the contract after one

week. Because the digitizing equipment was

prohibitively expensive at $200,000, it is unlikely

Kintz could have bid the job without CEG's

assistance.

Reduced-Fee ISO-9000 Certification. In 1995,

Kintz Plastics was the first of 10 companies to sign

up for an ISO-9000 certification course and

registration arranged by CEG. In addition, CEG

provided Kintz Plastics with an initial audit to

identify issues that would affect its certification.

11-126
The course and registration, provided by KPMG

Peat Marwick, would normally have cost $30,000—$40,000. CEG arranged for a group

discount rate of $10,000 per company. While Mr.

Kintz does not believe he would have paid full

price for the certification process, he was willing

to pay the group rate.

Changes in Manufacturing Practice

With the new job-tracking and machining systems

in place, Kintz Plastics substantially increased its

productivity and greatly enhanced its up-front

design work, mold tooling, and manufacturing

throughput. Mold development time was cut

dramatically. Molds that formerly took as long as

a month to complete now took a week. Currently,

the CNC cutting tools can work continuously for up to 30 hours on a complex mold form with little involvement of the CNC operator. The SYMIX

system allows comprehensive job tracking

throughout the many stages of manufacturing.

In the short term, the company was able to reduce

its mold design staff from six to two. In the long

term, the increase in capacity resulting from the new system contributed to the company's growth

from 95 employees in 1992 to 110 in 1994. For

the same period, manufacturing lead time was

reduced from 70 to 56 days; the product scrap rate was reduced from 6.0 to 4.2 percent; and

customer rejects were reduced from 2.3 percent to

1.2 percent.

The new shop-floor layout was a key component

in effectively using Kintz's new workspace, which now also houses production of an enclosed, freestanding steam and aroma-therapy spa designed

for two people. This layout helped improve

workflow and overall plant efficiency, including

reducing the movement of work in progress, much

of which involves large components.

Finally, through the CEG-arranged ISO

certification course in 1995, Kintz Plastics became

the first heavy-gauge plastic thermoformer to get ISO-9000 certification.

Outcomes

Mr. Kintz reports that the company has more than

tripled its sales from $2 million in 1990 to $7.5

million in 1995. The company attributes some of

this growth to New York MEP programs. It

estimates that its investments of approximately

$100,000 in MEP-affiliated improvements have

produced $2 million in benefits. For 1995 alone, it

estimates that CEG was responsible for $600,000

in sales. This $600,000 includes $50,000-

$100,000 in new export sales of high-performance

automobile gauges to Japan, a result of winning

the contract on which CEG assistance enabled

Kintz to bid.

Further, ISO certification has enhanced

significantly Kintz Plastics' reputation as a topquality manufacturer. For the past 4 years, the company has been distinguished as one of the top

heavy-gauge plastic thermoforming companies in

the United States.

Mr. Kintz, summarizing the effect on his business

of collaboration with NYMEP, stated that the new

systems changed Kintz Plastics "from a computerized job-tracking and machining momand-pop business to a real company." He added:

11-127
"We're very appreciative of CEG services and

quite frankly it has made us a better company.

And I'd tell anyone that."

Public Benefits

Despite a brief reduction in employment, the company's gains in productivity and

capacity have driven the creation of over 50 jobs

since 1990.

In addition, by contributing to increases in the corporate and personal tax base, CEG's activities

at Kintz Plastics have helped generate increased

public revenue.

il-128
CHRONOLOGY OF SERVICES

Introduction of new MIS system SYMIX Project management

overseen by CEG predecessor NEMTC.

Kintz receives demonstration of CAD/CAM design software for CNC mold tooling from NEMTC. The company adopts the

technology.

Kintz requests assistance with an expansion plan and CAD

layout design. Referred by NYMEP to Hudson Valley Community

College. Services produce new floor layout, work staging areas,

other work stations, and a system for work-flow analysis.

Kintz requests CEG assistance with production of two

thermoform molds for automotive gauge holders—specifically,

assistance to digitize rough models for mold development. CEG

field engineer quickly locates a resource, oversees the digitizing

process, and delivers the computer model to the company. Kintz

secures the contract as a result.

Kintz participates in the ISO-9000 certification process, arranged

by CEG at a cut rate through KPMG Peat Marwick. Kintz became

the first ISO-registered U.S. company in heavy-gauge plastic

thermoforming industry.

Case Study

LUITPOLD PHARMACEUTtCALS, INC

Shirley, New York

LONG ISLAND FORUM FOR TECHNOLOGY

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Douglas Welch

Nexus Associates, Inc.

Belmont, Mass.

11-131

S E STUDY

Luitpold Pharmaceuticals, Inc.

Luitpold Pharmaceuticals manufactures and

packages generic injectable drugs for use in

hospitals. The company employs over 300 people

at its facility in Shirley, New York. In 1994, total

sales for the company exceeded $50 million. The

company's principal activities include mixing 55

unique formula drugs and packaging them to government specifications.

Competition in the generic pharmaceuticals

industry is high. The business is order-driven, but

pricing is under contract between buying groups and the pharmaceutical companies. For each

product, Luitpold has roughly six competitors. Contracts are awarded primarily on the basis of

cost. However, quality and ability to deliver also

influence the bidding process. Materials constitute

the most significant cost component at roughly 86

percent of total direct costs. Controlling materials flow is therefore critical to keeping operating costs

low.

Identified Inefficiencies, Potential for

Change

Before Luitpold began working with the Long

Island Forum for Technology Inc. (LIFT), an

affiliate of New York Manufacturing Extension

Partnership (MEP), the company's key concerns

related to inefficiencies in its production line. In many cases, the company did not have the tools to measure these inefficiencies or the costs resulting

from them. By the same token, there was no

system in place to identify the causes of

inefficiency or to take remedial actions.

Inefficiencies in the production line had other

effects as well, particularly on the following areas:

• Fligh volumes of work-in-progress

• Fligh scrap rates

• The company's ability to meet earnings

projections

• Production overruns

• Delays in production line changes for the

filling areas

• Inability to identify a problem or its

source

In production management's view, many of these

inefficiencies related to government regulations

and could not be overcome. In addition,

management did not see any potential for real cost

savings. Luitpold was fully engaged with meeting

orders and did not have the resources to commit

to fine tuning its processes.

In September 1993, a LIFT field engineer met with

Luitpold. His effectiveness in communicating with

11-133
Luitpold's management was due in part to his

success as both an executive and engineer in the semiconductor industry. The field engineer

convinced Luitpold's management that changes were possible and that the company could improve

its manufacturing process.

Technical Assistance Provided

Assistance with Securing lEP Funding Support.

First, LIFT staff assisted Luitpold Pharmaceuticals

in completing an application for assistance from

the Industrial Effectiveness Program (lEP). The lEP

is a non-MEP, New York State government

financing program which supports modernization

efforts by in-state manufacturers. This application,

the product of a collaborative effort by LIFT and

Luitpold to identify and prioritize company needs and potential improvements, outlined a proposed

scope and projected cost of work to be performed.

Consultant Selection and Oversight. Once the

assistance had been approved, the LIFT field

engineer helped the company select a consultant to provide a Full Productivity Assessment (EPA) of

Luitpold's operation. The consultant ultimately

selected by Luitpold offered an additional

incentive: a guarantee that financial benefits from

project implementation would exceed total costs.

Under the EPA, begun in April 1994, the

consultant's principal focus was to develop a system to comprehensively track materials flow. Information from this new tracking system

ultimately would enable Luitpold to significantly

improve its manufacturing operations.

Throughout the project, LIFT fulfilled a mentoring

role by attending consultant-client meetings and

maintaining the focus of the project. In March

1996, 6 months after completion of the project, LIFT was to help Luitpold evaluate the project's

effectiveness and publicize the results, focusing on

bottom-line impacts.

Changes In Practices

Prior to the EPA, Luitpold lacked an effective system to collect and use production data. The

changes introduced by the consultant yielded these

results:

• Established material flow and

production tracking systems

• Provided production data to those

responsible for controlling the process

• Established work-to-time relationships

The material control system included software to

track production information and identify and

correct problems in the manufacturing process. A

key element of this change was putting this information in the hands of the people controlling

the processes.

The assistance entailed no dramatic changes to

shop-floor organization or manufacturing

processes. Instead, service was oriented to developing and reorganizing production-line

information. By developing tools to enable it to monitor work-flow and to associate processes with

costs, the company gained a valuable new

operations management capability. By applying

this new capability, Luitpold was able to identify,

and subsequently undertake, a series of

incremental, but important, improvements to their production systems.

11-134

I

I
Outcomes

The new system provided Luitpold management

and workers with the capability to improve

process management, control production, and

quantify associated costs and savings. According

to the firm's vice president of manufacturing,

positive outcomes included the following:

• Reduced unit cost of production

• Increased productivity per employee

• Reduced labor cost through reductions in overtime

• Reduced material purchases

• Reduced scrap rate

For calendar year 1995 alone, the company

estimated it saved approximately $710,000 in

total production costs. These savings did not result from any decline in production or employment, as

Luitpold's sales continued to increase during the

period of LIFT involvement while its employment

level remained stable.

According to both Luitpold and LIFT

representatives, Luitpold's cost savings are a direct

result of the services that LIFT and the consultant

delivered. Neither organization believes Luitpold

would have undertaken the production changes

yielding these productivity gains without this

assistance.

To implement the changes recommended through

LIFT, Luitpold executives estimate the company

spent $256,000 through the end of 1995. This

constitutes little more than a third of the projectrelated savings it received over the same period.

Public Benefits

The public benefits of changes made at LIFT occur

in two key areas:

1. Increased employment security for more than 300 persons due to improved company competitiveness

2. Increased corporate and personal tax revenues due to increased plant productivity

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CHRONOLOGY OF SERVICES

September 1993 . LIFT introduced services to Luitpold

• LIFT field engineer makes initial site visit to Luitpold.

• Company is made aware of the lEP program and

available funding.

October - December 1993 Pre-Project Assessment

• Company needs and potential improvements are

identified and prioritized.

• Company is assisted with lEP grant application.

• Consultant is selected to conduct FPA.

April - August 1995 FPA started

• Field engineer attends consultant-client meetings.

• Project focus is centered on company's needs.

September 1995 Services completed

March 1996 LIFT follow-up/evaluation

• LIFT evaluates impacts of services administered

under the lEP.

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Case Study

MARPLEX, INC.

Rhinelander, Wisconsin

NORTHWEST WISCONSIN MANUFACTURING

OUTREACH CENTER

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Oruille Nelson

Northwest Wisconsin Manufacturing Outreach Center

Menomonie, Wis.

11-137

A S E STUDY

Marplex, Inc.

Marplex, Inc., (Marplex) is located on the north

side of Rhinelander, a city of approximately 8000

residents in the heart of Wisconsin's forest lands. It converts logs into grade lumber, crating, and

pallets. The company is privately owned and

operates as a separate entity. It currently employs

approxim.ately 125 people. As a result of its

location, Marplex has ready access to logs and

lumber. Some lumber is purchased from area companies when there is an insufficient supply of

logs, or a need for special materials, kiln-dried

lumber, or special cuts.

Major products manufactured by Marplex include grade lumber, cut stock, skids, and specialized

wood crating and wood pallets. Each year, the company converts over 20 million board feet of mixed dense hardwood logs into specialized

crating and pallets. By-products and scrap from its manufacturing operations are processed and sold

to area companies. Scrap lumber and wood are turned into chips and sold to a paper mill. Bark is purchased by landscaping companies, and sawdust

is used as a fuel by area companies. The main

portion of the Marplex plant was built in the mid1960's. The sawmill portion of the plant was

destroyed in a fire in 1987 and rebuilt in 1988. A

new dimension sawmill was added in 1994. This

mill allows Marplex to produce grade lumber and

longer length materials.

Marplex does not handle the logs until they are

delivered to its plant site. From that point on it

processes the logs through various operations until

it produces dimension lumber for grade, cut stock,

specialized crating, and pallets for its customers. Operations done in the plant include debarking,

sawing the logs into boards and dimension stock,

cutting the lumber into parts for pallets and

specialized crating, fabricating the products, and

packaging them for delivery.

Marplex does not own the trucks that are used to

deliver final products. It has forklifts, log handlers,

and front-end loaders to move logs and lumber at

its plant site. Forklifts are also used to load the

final products.

Need for Assistance

Marplex has grown in size over the past 30 years and had added to its plant in a piecemeal fashion

as it needed space. Thus, there was a need to improve plant layout, materials handling, and

production systems. The company experiences

higher freight costs because it is located further from its customers than its competitors. In

addition, its labor costs tend to be higher than

those of its competitors.

Intense competition for the logs available in the

area was also creating cost pressures for the company. Reduced timber harvesting on federal- and state-owned lands and the growth of small sawmill operations had created a tight supply of

logs. Thus, a need existed to use purchased logs more efficiently and reduce processing costs.

11-139
Additionally, Marplex was concerned with

environmental issues. The plant is located within

approximately 500 feet of the Wisconsin River. Its

plant site has a large area on which logs are stored

in preparation for processing. Company

management was concerned about the impact of

its operations on the environment and needed to develop a storm-water pollution plan for the company.

Prior to the time the Northwest Wisconsin

Manufacturing Outreach Center (NWMOC)

started to work with Marplex, the company had

ordered an automated nailing machine for its

pallet line. This addition created a need to review

its pallet manufacturing system and determine the

best location for the machine.

Therefore, Marplex was seeking to become more

efficient and reduce its manufacturing costs, while

simultaneously addressing environmental

concerns, when it contacted the NWMOC.

Technical Assistance Areas

NWMOC provided nine separate technical

assistance projects to Marplex. These projects,

summarized in Table 1, were conducted from

April through early November 1995 and focused on the following six areas:

1. Human Resources—value-added

manufacturing (VAM) training sessions

2. Plant Layout/Manufacturing Cells

3. Environmental—assistance in

developing a storm water pollution

prevention plan

4. Process Improvement

5. Preventive Maintenance (PM)

6. Risk Control Assessment

The general process used by the NWMOC

staff to develop and change practices at Marplex

involved the following steps:

1. Discuss the problem with plant

managers.

2. Observe/collect data on the problem

area.

3. Analyze the data and prepare

tentative solutions.

4. Discuss tentative solutions with plant

personnel and select the best one. This process

involves a team approach.

5. Revise and refine the solution.

6. Discuss revised solution with

Marplex team.

7. Assist with implementation.

The resulting changes in Marplex

capabilities are summarized in Table 2.

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Table 1

Capacity For Change Created By NWMOC Technical Assistance

Technical Assistance Areas

Technical Assistance Provided New Capacity for Change

Human Resource Development

(1 TAP)

• Eight mini value-added

manufacturing sessions were

conducted for Marplex

employees. Each employee

attended a VAM session.

• All employees are aware of the VAM strategy.

• Many employees have

experience in applying VAM.

Plant Layout

(2 TAPS)

• Documented facility and machine

footprints.

• Formed product cells.

• Marplex has functioning

• Helped rearrange equipment.

• Marplex has a computer

assisted design (CAD) database

of its assets.

production cells.

• Implemented improvements in dust collector system.

• New automated nailing machine was located in a flow-through

design.

• Managers developed a knowledge of manufacturing cell design and flow-through manufacturing principles.

Environment

(2 TAPS)

• NWMOC staff assisted in identifying components needed in the company's storm-water

pollution prevention plan, acquired information needed to develop the plan, and helped to outline the plan. Nicolet Area

Technical College students did a complete survey of company

property and developed a contour map.

• Marplex management has a

better knowledge of how to manage its operations to reduce and eliminate pollution from its

facility Also, it knows where to seek information and assistance

in this area.

Process Improvement

(2 TAPS)

• Assisted in the redesign of the

infeed system for Plant 3.

• Designed fixtures to facilitate quick changeovers.

• Managers have an expanded

knowledge of flow-through

manufacturing concepts and the value of CAD in visualizing

solutions.

• Plant managers are more

knowledgeable of techniques used in quick

changeovers and how to reduce bottlenecks in manufacturing systems.

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Table 1 Continued

Technical Assistance AreasTechnical Assistance Provided New Capacity for Change

Maintenance

(1 TAP)

• Revised and assisted company in implementing preventive maintenance (PM) checksheets and procedures for mobile equipment.

• Plant employees have

developed the capacity to do PM checks and take appropriate

action. Oil and grease spills have been reduced.

• Designed and implemented

several continuous improvement

projects related to recycling, plant hygiene/housekeeping, and

workplace organization.

• Employees have expanded

knowledge of how to handle and

store materials used in production processes and how

to maintain safe working areas.

• Developed prestart checksheets

to assist operators in identifying needed repairs before equipment

is used.

• Maintenance staff and managers learned how to collect and analyze data to determine when PM is needed.

Risk Control

(1 TAP)

• Performed a risk control assessment at the plant.• Management is aware of a number of ways to reduce the stresses caused by repetitive motion and lifting.

TABLE 2

General Changes in Marplex Capabilities

• Developed the ability to use the VAM approach in the design and redesign of manufacturing systems, a paradigm that can be used as part of the company's

decision-making.

• Acquired a systematic problem-solving process.

• Developed an understanding of the use of CAD in visual problem solving.

• Expanded its capacity to access outside information and technical resources.

11-142
CAD Blueprint Database. The company did not have formal documentation and blueprints for most of its facilities. As a result of the work of NWMOC staff, it now has a computer-assisted

design (CAD) database of its assets and drawings

of its facilities.

Introduction ofManufacturing Cells. Marplex

wanted to become more responsive to its customers' requests. To do this, its manufacturing

systems had to become more productive and

flexible to be able to handle smaller batch sizes. Just-In-Time (JIT) manufacturing principles were

applied to accomplish these goals.

NWMOC staff members observed the manufacturing processes and systems used in Plant

1. They developed flow charts of the process and

activities involved in producing each of the

products. They also documented facility and

machine footprints.

Alternative equipment layouts were developed

from this information. The resulting bubble

diagrams were discussed with a team of Marplex

employees and managers. Marplex made the

decision to rearrange the production line for its

highest-volume product into a cellular layout,

which reduced materials handling and work in

process. The new, automated nailing machine was

placed near the shipping area. The new layout

reduces work in process and the distance materials

travel. In addition, new jigs and fixtures were

designed to reduce changeover time. Layout

options for future business growth were also

developed and presented, including expansion of

manufacturing into a cold storage area, improvements to loading docks, and changes in

office space.

Dust Collection System. As these changes were

being made, the dust collection system was also

redesigned to improve its effectiveness and

eliminate downtime. Some downtime had been

experienced because the old system would plug

up. The NWMOC project manager worked with

vendors and a team from Marplex to redesign the

dust collection system.

Storm-Water Pollution Prevention Plan. Two of

the technical assistance projects were associated with the preparation of a storm-water pollution

prevention plan. Marplex was required to develop

and submit a storm-water pollution control plan

for its property by the end of December 1995. Developing this plan involved reviewing a number

of documents, and assembling information by the Wisconsin Department of Natural Resources (DNR). Implementation of this plan will reduce

the potential of pollution problems in a geographic area noted for its recreation and

tourism, and will help identify solutions to any

problems noted. Marplex did not have the

specialized resources needed to carry out the

required land survey, nor did it have time to

review all of the related documents to determine

what was relevant for its plan. It thus needed

assistance in identifying information and resources with which to create the final plan.

NWMOC staff reviewed the Wisconsin DNR

documents and isolated the critical factors that

11-143
needed to be considered in developing the plan.

Students from Nicolet Area Technical College, one

of the NWMOC partners, surveyed the company

property and developed a site map.

After this information was assembled, Marplex

contracted with a company specializing in developing these plans. The consulting company

used the information assembled by NWMOC staff

to complete the plan. Marplex managers

remarked, "The assistance of the NWMOC staff was very helpful in developing the plan. Our daily

tasks do not leave us a lot of time to spend

reviewing complex documents and trying to find

outside resources to develop a plan such as this." The consultant company also reported that the -

information was useful and reduced the amount of work it had to do.

Redesign of Sawmill Infeed System. Two process improvement projects related to the sawmill infeed system were completed at Marplex that had a

significant impact on productivity and also will have a long-term impact on how plant managers

and employees approach process redesign in the

future.

With the original log infeed system for Plant 3,

logs were placed on the infeed deck, which

extended outside of the building. The logs entered

the building and were raised on a quadrant feeder

to a conveyor belt. The conveyor belt transported

the logs to the vertical elevator located at the

infeed end of the saw. From the vertical elevator,

the logs were placed on the singulator to keep

them in single file. Logs moved off the singulator

to the belt conveyor into the twin band saw.

Marplex experienced a number of problems with

this system. The quadrant feeder had significant

maintenance problems with hydraulic cylinders

needing frequent replacement. One person had to be assigned to the system to monitor and reduce

infeed problems. This problem was identified by

Marplex as a high-priority area. The NWMOC

project manager reviewed the problem with plant managers. Applying the principles of value-added

manufacturing, they concluded that the conveyor

system from the original infeed deck to the vertical

elevator did not add value to the manufacturing

process. It was decided that moving the infeed deck to the infeed end of the sawmill would allow

the logs to move directly and smoothly into the

sawmill's infeed conveyor.

Because the new infeed deck and the equipment

needed to raise the logs to the sawmill had to be

designed into the existing facility, the NWMOC

project manager brought the NWMOC CAD

specialist and CAD equipment to the Marplex

plant. Marplex did not have CAD equipment or a CAD operator who could assist with the design

work. The two NWMOC staff members worked

with Marplex managers to develop a tentative

design for the new infeed system. In the new

system, logs flow directly up from the infeed table

to the infeed conveyor belt for the sawmill; thus it was possible to eliminate the quadrant feeder and

the horizontal conveyor belt from the system.

However, the new system had to fit with the

existing location of the sawmill, the outer walls of

the facility, and two concrete pillars that could not

be moved. NWMOC staff collected measurement

data and developed an initial design. Marplex staff were able to view the design and make

suggestions. Various changes were tried and

resulting layouts discussed.

11-144
Marplex decided to implement the design and

make changes. The manager directly associated with implementing these changes commented that, "Everything fit as designed. We did not have to make any significant changes." Logs are now

loaded on the infeed deck, moved into the

building, and placed in single file by the singulator. At the end of the singulator they are dropped one

by one on the vertical ladder.

Preventive Maintenance Techniques and Risk

Control Assessment. NWMOC staff jointly

developed several preventive maintenance (PM)

techniques with the maintenance staff at Marplex,

discussing record keeping, checksheets, and

preventive measures. These actions have led to fewer oil and grease spills, more appropriate

handling of waste materials, and more preventive

maintenance. NWMOC also conducted risk

control assessment with an emphasis on

ergonomics in the plant, offering several

suggestions to reduce the stress from lifting,

repetitive movements, and vibration.

Outcomes

The redesign of the infeed system for the sawmill

in Plant 3 resulted in significant savings in down

time and employee time used to monitor the infeed

process. The maintenance supervisor commented,

"We have eliminated at least 80 percent of the down time on the infeed system for that sawmill." As a result of the improvement in this system, the company was able to reassign one of its employees

to a job in another part of the plant.

In addition, removing the quadrant feeder from

the system significantly reduced the amount of maintenance that must be done. The maintenance

manager estimated that it had taken an average of 12 hours per week to maintain the quadrant

feeder.

The Marplex management team was satisfied with

the new infeed system's effectiveness. They also noted that the assistance of NWMOC staff was

helpful and critical in several areas. The CAD

skills, software, and equipment brought onsite by

staff was identified as being especially helpful in developing a visual solution to their problem.

Marplex staff commented that the instant design

changes, made possible by CAD, were very

helpful. They were able to see several possible

solutions in a short period of time and select the one they thought to be most functional. This

solution was later slightly refined and

implemented. The installation occurred without

major problems. The new system has worked

effectively.

Marplex staff also noted that it was helpful to have NWMOC staff with technical and

engineering backgrounds available to them. As a consequence, the NWMOC staff could focus on

the problem area, gather information, and develop

tentative solutions, and thus avoid diverting

Marplex staff from managing ongoing activities and resolving emergencies.

As a result of the work in developing their storm- water prevention plan, Marplex decommissioned

a conical burner in June 1996 to reduce air

emissions. New snow storage procedures have

11-145
been put into effect to reduce the potential of runoff pollution. In addition, its dust collection

system does a more efficient and effective job of

capturing sawdust and dust from its operations.

New housekeeping and preventive maintenance

procedures have reduced the amount of wood and

petroleum waste on the plant grounds.

The efforts of introducing the plant managers to

cell design have reduced the amount of work in

process and developed a more flexible manufacturing system. It is now possible to

efficiently produce smaller batch sizes and change

to new parts more quickly. According to the plant manager, these changes have increased production

per employee by 20 percent. As a result of the

technical assistance provided in this area, Marplex

managers and employees also have become more

knowledgeable of flow-through manufacturing

principles, manufacturing cell design, and

techniques to reduce changeover time.

The consensus from the managers involved with

this portion of the project was that their

experience with cellular layout and the

information gained from the Valued Added

Manufacturing (VAM) workshop provided a

useful model for developing future improvements

in their production systems. They commented that

there was a need to continue to improve their production processes and systems to meet their

customers' needs.

Benefits to the Firm

The technical assistance projects conducted by

NWMOC staff have increased Marplex's capacity

to respond to its customers' requests and needs

while reducing its annual costs by $120,000. This

assistance helped the company complete its stormwater pollution plan, as required. Implementation

of this plan will reduce the potential of pollution

problems in a geographic area noted for its

recreation and tourism.

Cost savings related to eliminating the need for a

full-time person to work with the infeed system and

reducing maintenance time by 12 hours per week

would total about $3,000 per month. This is a

conservative estimate of savings since it does not

include the time that would be lost when a breakdown occurred in the infeed system. Also, it does not include the cost of parts to repair the quadrant feeder and conveyor, which were

eliminated from the system. In addition, these changes reduced electrical consumption and

eliminated the preventive maintenance costs for

these components.

The common feeling among steering committee

members was that the complementary

improvements to the production system and the new system put in place had provided them with more flexibility. One of the managers commented

that, "We are now able to respond to our

customers' requests more quickly." Another

manager commented, "We are doing more with

less." The plant manager estimated these savings

amounted to $7,000 per month, reflecting less downtime and a more efficient production system

that required less overtime and work in process.

The increased capabilities developed at Marplex

will help to preserve the 125 jobs at the company.

In a town of 8000 people this company has an

important impact on the local economy.

11-146
Other Improvements. Follow-up interviews at Marplex, conducted approximately 3 months after the completion of the project, revealed several more general outcomes and impacts of their

interaction with NWMOC staff, impacts that cut across the several technical assistance projects

conducted in the plant and the specific changes

implemented. These capabilities are more general

and continue to influence the work of plant

managers and employees. Introduction to the VAM approach has created a new paradigm for

their decision-making. One of the plant managers

commented that, "As I view the processes we use,

I try to determine the value added by each one." Another noted that he uses the VAM principles

when he designs or redesigns processes and

systems. Similarly, steering committee members at

the plant reported in the follow-up interview

session that, "VAM has provided us with a new

way of looking at our manufacturing systems and

processes. We are now constantly looking at the

value added by the activities we do and the changes we consider."

It was also apparent that the problem-solving

approach used by NWMOC staff had an impact.

One of the managers commented that, "One of the

valuable skills I learned was the systematic

problem-solving process used by the NWMOC

staff members." In addition, Marplex staff members found that CAD and visual problemsolving to be useful tools. Some staff members also

noted that their work with the NWMOC project

manager had increased their awareness of

informational and technical resources available to them in their company.

Competing Explanations

There were no other external consultants or

resource people working with the areas covered by

the technical assistance activities at Marplex

during the time of the NWMOC project. There were no competing explanations for the impacts

that resulted from the changes in Plants 3 and 4. These changes reduced annual costs by $120,000

per year. A mechanical design company did the

final design and installation of the dust collector

system.

An automated pallet nailing machine had been

purchased prior to the time of the NWMOC

interaction with Marplex. This decision aroused

the need for revisions in the layout of part of Plant

1. The NWMOC project manager assisted with

the new layout.

A certified consulting firm was hired to finalize the storm-water pollution prevention plan. However,

this firm was retained after the NWMOC project

had been completed. The data and draft plan

compiled by NWMOC staff were used by the

consulting firm.

11-147

Case Study

RCF SEALS & COUPLINGS, INC.

Vidalia, Georgia

GEORGIA MANUFACTURING EXTENSION

ALLIANCE

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Jan Youtie

Economic Development Institute

Georgia Institute of Technology

Atlanta, Ga.

11-149

A S E STUDY

RCF Seals and Couplings, Inc.

RCF Seals and Couplings, Inc. (RCF),

manufactures rubber-coated fabric seals and

couplings for the aerospace industry. Its 32- employee facility is located in Vidalia, Georgia, a

rural community approximately 3 hours southeast

of Atlanta.

Product Requires New Testing Procedure

RCF developed a rubber-coated seal for its

customer, Learjet, Inc. The seals were to be used on a critical system' on the new Learjet 45 (a 10-

passenger business jet). The seal was designed as a

state-of-the-art economical solution' to an ongoing

industry problem—the ability to withstand

sustained temperatures of over 800 °F. Cost

pressures and declining demand (see Table 1) have

prompted aerospace industry manufacturers to produce more fuel-efficient aircraft capable of

operating at higher temperatures. Low-cost

materials that can withstand high temperatures are

thus desirable.

Table 1

Declining Aerospace Industry Value of Shipments: 1988 vs. 1994*

(Values in billions of dollars)

Value of Shipments 1988 1994

Current dollars Constant (1987) dollars

107.7

106.7

101.7

92.3

''Years were chosen to exclude the Gulf War build-up.

Source: U.S. Department of Commerce, International Trade

Administration, U.S. Industrial Oudook, 1994, pp. 20-1.

RCF faced a problem in locating testing facilities capable of subjecting the seal to 800 ° F heat and

complex mechanical motions simulating air

service. A cold-temperature (-65 °F) test was also

required. The seal had to be tested before the

Learjet 45 could meet its first flight date in 1995,

so time was critical.

RCF's president explained the crucial nature of the

test: "The importance of this test to my company

is clear—a test of our material at the required

temperatures will document the use of our hightemperature elastomeric material. More

importantly, however, is that other companies are

eagerly awaiting these results."^

RCF does not conduct its own testing. Learjet also

lacked the specialized resources to test this

application of RCF's seals. RCF was unable to find any commercial sources that could perform the high-temperature test at a sustainable price and

within Learjet's required time frame.

Georgia Manufacturing Extension

Alliance Helps Find Testing Facilities RCF contacted the local regional office of the Georgia Manufacturing Extension Alliance (GMEA) in Dublin, Georgia, for help.'' The

GMEA regional office manager, who had worked

with RCF on several previous projects,' called the GMEA Technology Linkages Office in Atlanta on

February 23, 1995, to assist in identifying testing

facilities.*

11-151
After discussing the problem with RCF, the GMEA

Technology Linkages Office manager contacted

the Direct Assistance Program at the Oak Ridge

National Laboratory in Oak Ridge, Tennessee/

The GMEA Technology Linkages Office manager

had recently toured several Oak Ridge

laboratories, including the High Temperature

Materials Laboratory (HTML). The Technology

Linkages Office manager inquired about the use of

the laboratory for testing, and formulated a

request for technical assistance on behalf of RCF.

The Oak Ridge Direct Assistance Program

arranged for a scientist from HTML to be assigned

to the project. The Technology Linkages Office manager, accompanied by representatives of RCF

and Learjet, visited the HTML on April 21, 1995,

to review the preliminary test apparatus and make

suggestions. RCF qualified for 80 hours of free

technical assistance and, because Learjet was

present at the site visit, an additional 80 hours of

assistance.* The GMEA Technology Linkages

Office provided 20 hours of assistance, also at no

charge to RCF.

Actual testing began the following week. In all,

five separate tests were performed as part of an

iterative process of redesigning and testing, during

which RCF made changes in the seal and

couplings mechanism. Earlier versions of RCF's

seal failed two of the high-temperature tests.'

Oak Ridge could perform the high-temperature

portion of the test, but not the cold-temperature

portion. In parallel with the Oak Ridge activities,

the GMEA Technology Linkages Office manager

contacted the Warner Robins Air Logistics Center (WRALC), the closest Federal lab facility to RCE

WRALC had the facilities to perform the coldtemperature test, but because the timetable was

accelerated and WRALC had other work in

process, the Technology Linkages Office arranged

to have Oak Ridge ship their test fixturing to WRALC for use in the WRALC environmental

chamber. This action gave Learjet more confidence

in the test and, although WRALC ultimately had

to design and fabricate its own test fixture, having

the Oak Ridge design concept helped make it

possible for WRALC to perform the test.^°

Seal Passes Tests and RCF Learns about

the Federal Laboratory System

RCF's seal successfully passed high- and cold- temperature tests in August. The tests proved for

the first time that this type of seal can withstand

sustained temperatures of as high as 800 °F and as low as -65 °F and complex mechanical motions

simulating two years of service.'^

Another benefit was that RCF learned about the

federal laboratory system. In September 1995,

RCF submitted a proposal to the HTML User

Center Program, which enables companies to work directly with the laboratory on nonproprietary research at no cost. Through this program, RCF is testing a seal design that uses less

exact connections that are more economical to manufacture. RCF is also exploring the possibility

of licensing the testing apparatus from Oak Ridge,

which would give the firm in-house testing

capability. Table 2 summarizes these changes in RCF's capabilities.

Learjet engineers, previously unaware of industry

assistance programs, were impressed with the

assistance provided by GMEA and Oak Ridge. As

a follow-up, the GMEA Technology Linkages

11-152
office manager gave Learjet contacts at similar programs near its headquarters—the Mid-America

MTC and the DOE-Allied Signal Kansas City,

Missouri, facility.'^

Test Results Help RCF Generate New Sales

RCF has received orders from Learjet and other commercial and military aircraft manufacturers

since the test. Sikorsky Helicopters and Pratt &: Whitney of Canada have placed or plan to place

orders.'^ RCF has already booked an additional $2

million in orders over the next 2 years,^"* and is planning to introduce applications for the seal in other industries, beginning with petrochemicals.'^

The company believes that it could potentially

generate $50 million in sales over the life of the

seal.

Export Sales, New Jobs for Vidaiia

Although only about 2 percent of RCF's sales

currently go to firms outside the United States, RCF has given sales presentations at the invitation

of foreign aerospace contractors. The company

believes that export sales could equal domestic

sales over the life of the seal.

RCF's 32-employee workforce reflects the addition

of 10 new jobs in 1995. New employees were added in the areas of office support, production,

inspection, document and production control,

machining, and engineering. Some of these

positions represented a new "middle

management" layer for the company. Table 3 summarizes sales and job impacts.

Table 2

Changes in RCF Product Development Testing Capabilities

Before

Assistance

• No systematic proof of high-temperature and mechanical motion tolerance

• No in-house testing capabilities

• Never used the federal laboratories

Atter Assistance

• Independent testing data shows the seal materials can withstand temperatures

ranging from -65 °F to +800 °F and motions simulating two years of service

• RCF and customer learned how to use the federal laboratories

• Potential to license testing equipment which would provide in-house testing capability

11-153
Table 3

Changes in RCF Sales and Employment after Assistance

Sales Jobs

Before

Assistance

• $1.2 million in 1994

• Roughly 95 percent of sales to customers in the commercial, domestic aerospace industry

• 22 employees

• Top managers performed

supervisory functions

After Assistance• Additional $2 million booked over 2 years

• Potential sales in petrochemical industry

• Additional expert sales

• 1 0 new jobs, all functions

• Added new "middle management"

layer

No Alternative Explanations

Although RCF had the product and customer in hand, the lack of test data for FAA certification was a barrier to closing the sale. The small company did not have the resources to conduct or pay for testing. Learjet did not know of a suitable

testing source, and RCF's networking efforts did not produce an appropriate testing laboratory.

In all of RCF's efforts to find a testing facility, the

federal laboratories did not surface as a resource. "Nobody had ever heard of using the Federal

labs," said RCF's president.'* The GMEA

Technology Linkages Office manager concurred,

saying "anyone off the street would have a tough

time knowing the right people to contact."'^ WRALC, for example, had never provided this

type of technical assistance to small Georgia

manufacturers prior to this project.

In a letter to Martin Marietta Energy Systems, now Lockhead Martin Energy Systems, Inc., which

referenced the GMEA Technology Linkages Office manager and Oak Ridge personnel, RCF's

president stated, "None of this would have been

possible without the considerable help of the gentlemen named above."'*

11-154
CHRONOLOGY OF SERVICES

April 1994

June 1994

July 1994

September 1994

November 1994

December 1994

Early January 1995

End of January 1995

February 23, 1995

Early March 1995

March 7, 1995

Mid March 1995

RCF sites facility in region, meets GMEA regional office manager. GMEA

provides plant layout assistance. RCF requested information on locating a vendor to retrofit its compression

molds. GMEA regional manager contacted six companies which likely had

technical capabilities, but only two had scheduling capacity.

The regional manager used the Georgia Tech Metalworking Job Shop

Directory to identify all vendors within a two-hour radius of Vidalia.

Information was mailed to RCF.

RCF requested information on monatomic hydrogen, which GMEA's

Information and Data Services group supplied.

RCF requested information about sources for fatigue failure stress analysis of

seal component. GMEA regional manager contacts another regional office manager who provides four suggestions for testing sources, both university

and private-sector sources. GMEA regional office manager continued to search for fatigue failure stress

analysis of seal component, spending several hours contacting GMEA

regional offices and Georgia Tech departments. He located a researcher in

Georgia Tech Research Institute's Aerospace Laboratory. The researcher

analyzed the design and suggested design modifications in a technical report,

"Assessment of RCF Coupling Failures," December 16, 1994. The project

involved 30 total hours of effort. RCF called GMEA regional manager, requesting assistance for recruiting

Georgia Tech alumni and students for employment. Information was relayed

back to RCE

RCF called GMEA regional manager. Its major customer, Learjet, Inc.,

required RCF to test seals used in cabin pressurization, a new application for RCF's product. This test, which called for low- and high-temperature

exposure, had to be passed before Learjet's new passenger aircraft could start

its FAA certification trials. GMEA manager requested written requirements of

test lab. GMEA regional manager contacted the GMEA Technology Linkages Office (TLO) manager. TLO manager started working with Warner Robins Air

Logistics Center (WRALC).

GMEA regional manager and TLO manager met to discuss urgency of test

and how to expedite actions involving WRALC.

Because WRALC could only perform the cold-temperature portion of the test, TLO submitted request to Oak Ridge National Laboratory to perform hightemperature testing.

TLO manager contacted Oak Ridge Direct Assistance Program about

utilizing its High Temperature Materials Laboratory (HTML). Several

conference calls occurred.

11-155
Early April 1995

Mid April 1995

April 21, 1995

End of April 1995

May 1995

June 12, 1995

June 30, 1995

August 1995

September 1995

October 7, 1995

October 17, 1996

RCF qualified for technical assistance. The Oak Ridge HTML scientist set up

the testing apparatus.

GMEA TLO manager set up visit with the Oak Ridge HTML scientist and

representatives from RCF and Learjet to review the preliminary test results. TLO manager and representatives from RCF and Learjet visited Oak Ridge

HTML, reviewed the progress, and made suggestions to modify the test

apparatus. TLO gave RCF's customer contacts at another MEP center (the Mid-America Manufacturing Technology Center) and federal laboratory

(Department of Energy—Allied Signal facility) near Learjet's headquarters.

Oak Ridge HTML fabricated special test fixtures that could be used in the WRALC cold-temperature test environmental chamber. HTML began testing

series. RCF continued to make design changes.

Oak Ridge submitted preliminary summary of Test 3 and Test 4 data to RCF

showing failure of early versions of the seal. RCF shipped seal and testing fixture to WRALC for further testing.

Preliminary report material from Oak Ridge submitted on August 7 showed

seals passed high-temperature Test 5 (consisting of more than 4000 10-minute

thermal cycles operating 24 hours a day over a four-week period, simulating

two years of service). Final report from WRALC submitted on August 14 showed seals passed cold-temperature test (consisting of 50,000 motion cycles

of 100 cycles a minute operating a few hours a day over a five-day period).

RCF joined Oak Ridge HTML User Center Program. Assistance featured in

"Spotlight on Technology," NASA Southeast Regional Technology Transfer

Center 8c Southeast Regional Federal Laboratory Consortium, September/

October 1995, Vol. 4, No. 5, p. 5.

Learjet 45 launched its business jet's first flight. RCF requested testing to qualify its seals in petroleum industry applications.

The TLO manager sent a request to the Georgia Tech Research Institute. The

reply the following day recommended Georgia Tech and external researchers

provide this testing assistance and identified the need for specific test

parameters which RCF is finalizing.

11-156
ENDNOTES

1. The aircraft's bleed air system, which powers anti-icing, environmental control, and other systems by

diverting high-pressure air from the engine's exhaust system.

2. Interview with the president of RCF Seals and Couplings, Inc., November 20, 1995, who indicated

that, although other products could perform the same function, they were at least four times as expensive.

3. Letter from RCF to Martin Marietta Energy Systems, contractor to Oak Ridge National Laboratory,

May 13, 1995.

4. The Georgia Manufacturing Extension Alliance (GMEA) is a NIST/MEP-sponsored partnership of

four organizations that provide an integrated model for delivering management and technical

assistance to small- and medium-sized manufactures in Georgia. The partnership, led by the Georgia

Institute of Technology (Georgia Tech) Economic Development Institute (EDI), includes the University of Georgia Small Business Development Centers (SBDC), the state Department of Technical and Adult

Education's (DTAE) Quick Start program, and Georgia Power Company's Technology Applications Center (TAC).

5. GMEA worked with RCF on several projects in 1994 prior to this request:plant layout assistance,

metalworking vendor information, and stress analysis of coupling fatigue failure. For more

information about the stress analysis, see "Assessment of RCF Coupling Failures," Preston R. Bates, Georgia Tech Research Institute, December 16, 1994.

6. The Technology Linkages Office coordinates access to resources for problems requiring specialized or

expert assistance, particularly from university faculty and the federal laboratories.

7. Technical assistance request, March 7, 1995. Initially, Warner Robins Air Logistics Center (WRALC)

was contacted, but could not perform the high-temperature test.

8. The assistance was funded under the Oak Ridge Technical Asistance Program and the National

Machine Tool Partnership (now discontinued).

9. Martin Marietta Energy Systams, Inc., review of RCF/Learjet Project, internal correspondence, June

12, 1995.

10. Warner Robins Air Logistics Center, "RCF Seal Cold Temperature Qualification Test," August 14, 1995. The WRALC engineers used the Oak Ridge design concept even though they could not use the

actual fixture. The test was provided to GMEA as an experiment in providing this type of assistance.

11. Ibid. See Oak Ridge National Laboratory, Metals and Ceramics Division, High Temperature Materials

Laboratory, August 7, 1995 (fax of test results). The fifth Oak Ridge HTML high-temperature test, which RCF's seal passed, consisted of more than 4000 thermal cycles lasting 10 minutes each and

operating 24 hours a day over a four-week period. The WRALC cold-temperature test consisted of

50,000 motion cycles (100 cycles a minute) operating a few hours a day over a 5-day period.

12. Interview, GMEA Technology Linkages Office manager, June 23, 1995.

13. Letter from RCF to Martin Marietta Energy Systems, contractor to Oak Ridge National Laboratory,

May 13, 1995.

14. See Supplementary Materials, Production Log, November 20, 1995, which illustrates how RCF tracks

customer bookings. The company currently has orders to supply approximately $90,000 in seals for

five Learjet airplanes per year. The remaining 55 percent of sales represents bookings with Sikorsky,

Pratt & Whitney, and other customers.

11-157
15. RCF asked the GMEA Technology Linkages Office manager for assistance in identifying

petrochemicals industry resources. See internal memorandum, GMEA Technology Linkages Office,

request for test of elastomer composite compatibility with various organic materials typically used in a petroleum plant, October 18, 1995.

16. Interview with President of RCF Seals and Couplings, Inc;, November 20, 1995.

17. Interview with manager of GMEA Technology Linkages Office, October 26, 1995.

18. Letter from RCF to Martin Marietta Energy Systems, which manages Oak Ridge National Laboratory,

May 13, 1995.

11-158
Case Study

SHAKESPEARE ELECTRONICS AND FIBERGLASS

Newberry, South Carolina

SOUTHEAST MANUFACTURING TECHNOLOGY

CENTER

an affiliate of the IVlanufacturing Extension Partnership

November 1996

Prepared by:

English Drews

Southeast Manufacturing Technology Center

Columbia, S.C.

11-159

S E STUDY

Shakespeare Electronics and

Fiberglass

Shakespeare Electronics and Fiberglass

(Shakespeare) has been revolutionizing the fishing

industry since 1897 when William Shakespeare, Jr. created and patented the level wind fishing reel.

Fifty years later, Shakespeare introduced the first

fiberglass "wonder" rod maintaining its reputation

as a pioneer in the fishing industry. By 1960, the Shakespeare was one of the leaders in fiberglass

development in the United States and expanded

into a variety of fiberglass products including:

radio-military antennas, pool cues, archery

equipment, hammer handles, ski poles, fishing

rods, and light poles. Shakespeare relocated to Newberry, South Carolina, in 1965 and was

formed exclusively for the manufacture and sale of

fiberglass antennas.

The Newberry location has 355 employees and

not only manufactures communication antennas,

but uses the same technology to produce fiberglass

poles for the fishing industry and fiberglass light

poles.

Today, Shakespeare is an internationally

recognized organization. The firm is ranked in the

top ten of the domestic fishing tackle market with

recent growth averaging 10—15 percent. Its

competitors include Zebco, Berkley/Fenwick,

Johnson/Mitchell, and Penn and Silstar. The

customer base for Shakespeare's line of products

includes mass merchants, distributors, and

retailers such as Walmart, Target, Sports Authority,

Kmart, and Sportmart.

The Nature of the Technical Assistance

The Challenge. The original Ugly Stik® was a 20-

year-old design. Based on the number of fishing

license requests over the past 10 years, the fishing

industry was not a growing market. Competition

had increased, with labor intensive processes moving overseas.

With strong competition and a stagnant market,

Shakespeare wanted to develop the next generation

fishing rod, extending the product life cycle of the

current Ugly Stik®. In January 1994, Shakespeare

set out to design its next innovative product—

fishing rod that was thinner, lighter, more sensitive, and that retained its strength.

In the past, Shakespeare had used trial-anderror

processes to develop prototypes in the design of new products. However, tooling for new product

design was time consuming and costly—as much as

$10,000 per design which, with various materials and configurations, could add up to $150,000 for a

single style product. Wanting minimal timetomarket, Shakespeare required a different approach

to product development. Shakespeare contacted the

Southeast Manufacturing Technology Center (SMTC) at the University of South Carolina (USC)

for assistance in duplicating its design concepts

with computer simulation design and modeling

tools.

11-161
The Solution. SMTC at USC's expertise is in advanced technology applications. Through

computer simulation, senior specialists Dr. Roger

Hsiao and Dr. Curtis Rhodes sought to duplicate

the dynamic characteristics of the existing Ugly

Stik® and incorporate various combinations of

composites. Phase 1 of the project was to develop

a computer simulation tool to analytically predict

the static and dynamic behavior of the fishing rod. Phase 2 was to design and fabricate prototype rods

to verify computer simulation. SMTC participated

in Shakespeare's weekly and biweekly design

meetings, and acted as a validation and

verification resource throughout the application of

this advanced technology. William Banczak,

Shakespeare director of research, states, "This

project represented a great collaboration effort and SMTC provided us the technology resources

that we lacked internally." The computer

simulation tool was able to predict the sensitivity,

weight, and functionality of the new design

without the extended prototype lead times and

costs associated with trial-and-error methods.

In July 1994, prototypes were reviewed at the American Sportfishing Association (ASA)

Exposition. Wide acceptance of the product led to an expansion of the original project. Phase 3 was

added to include design tooling and cut schedules

for nine spinning rods, four casting rods, and six

fly rods, with the goal of introducing the products

at the July 1995 ASA show. With a new critical

time element and expanded project objectives,

manufacturing had to begin in January 1995 to be ready for the show.

New Manufacturing Processes Raise

Performance Levels

The introduction of a computer simulation tool

to Shakespeare's new product development and

introduction process helped the company design

its products more efficiently and accurately with

reduced time-to-market. Shakespeare met its

design and production schedules for the ASA

show, where it introduced the Ugly Stik® Lite

Series. Of the new, exotic materials considered

for the new product, ultimately, a graphite-andglass combination was determined as optimal. In

addition, alternative processes and cutting

schedules were considered to help optimize the product design. The product weight was reduced an average of 10-15 percent, while the diameter was reduced by 25-30 percent. Along with this

reduction in product material and weight, the product strength was maintained, and in some

cases, improved. The new Ugly Stik® Lite Series was enthusiastically received at the ASA

conference and, more importantly, by consumers. Within the first five months of new product

introduction, 90 percent of the original annual

forecast was produced. With an estimated

product life of 10 years, total projected sales of

this new product is expected to be $7,700,000.

"Interestingly, one of our competitors also

introduced a new 'lite' product at the ASA show.

If we hadn't met our time-to-market and design

objectives, we could have lost 10 percent of our

total business to the competitor," states Banczak.

The new technology implemented for this product design process accelerated Shakespeare's

ability to introduce new products. Shakespeare was once again seen as an innovator in

fiberglass-reinforced products. Its reputation and

positioning in the market was solidified by this

11-162
new product introduction. Finally, the project not only facilitated Shakespeare's ability to introduce a new and innovative product, but also helped it gain a better understanding generally of its product and process.

Public Benefits

The product life cycle of the original Ugly Stik®—

the number one selling rod for 19 years—was

extended with the introduction of a lighter^

thinner, and more sensitive rod. The positive response by the market is visible in Shakespeare's

increased sales. In addition, the success of the Ugly

Stik® has caused Shakespeare to maintain

its work force level, with 20 percent directly

impacted based on this new product introduction.

Alternative Explanations

SMTC was one of many participants in

Shakespeare's project team for this new product

development. Also included in the project team was Monroe Lindler, a former Shakespeare

employee and now a consultant, who had

extensive experience in designing rods using

traditional methods. The combination of the

resources contributed to the success of this project.

However, no other activities were underway that would have resulted in the improved product

design with the reduced development costs and

time-to-market.

11-163
CHRONOLOGY OF SERVICES

January 1994 • Shakespeare identified need for a new, improved product.

July 1994 • Prototypes ready for American Sportfishing Association (ASA)

Exposition.

September 1994 • Service contract signed for expanded project—"lite" series. September 1994 • Project development begins.

January 1995 • Product series completed.

January 1995 • Product begins.

July 1995 • New products introduced at the ASA show.

11-164
Case Study

SHERWOOD PLASTICS, INC.

Fostoria, Ohio

LAKE ERIE MANUFACTURING EXTENSION

PARTNERSHIP

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Richard L. Hanson

Lake Erie Manufacturing Extension Partnership

Toledo, Ohio

11-165

S E ST U D Y

Sherwood Plastics, Inc.

After 25 years with Diamond Shamrock, Inc., Mark Jones retired from the company and began

searching for a company of his own to buy. He

considered more than 100 firms with annual sales between $3 million and $10 million before

selecting Sherwood Plastics. Mr. Jones had

reasoned that the major weakness in Sherwood's

profile could, in fact, offer an opportunity:

Sherwood was totally dependent on the heavy

duty (class 8) trucking industry for orders. With

the help of a silent partner, a basic strategy evolved

to purchase the business and diversify the product

line and targeted markets.

Sherwood is a rotational molder. Rotational

plastic molding is an excellent alternative manufacturing process, for low-volume

production of hollow plastic components with

complex and varied shapes. It is superior to other molding techniques in the crucial areas of low

tooling cost, quick change-over time, minimum

economical lot sizes, and part size. Roto-molded

products often provide a lightweight replacement

for more commonly used materials. A

combination of improved plastics technology with

advances in mold construction, resins, and

machinery has prompted the use of a variety of

plastics. Versatility of the process allows for product sizes ranging from small ear syringes of

plastisol to large 22,000 gallon vessels of

polyethylene. The roto molding process has three

stages:

1. Ground polyethylene (90 percent of Sherwood's volume) is added to a split aluminum mold of the part at the load/unload

station.

2. The roto-molding machine then rotates the mold into a oven where it is heated to 550 ° F

- 600 ° F degrees Fahrenheit for about 12 minutes to 15 minutes while rotating on two

axes at low speed.

3. The mold is indexed to the cooling station, where water or air is used to cool it to approximately room temperature. Secondary

operations include flash trimmmg, cut outs, and drilling and assembly of purchased

components, after the parts are allowed to

cool.

Mr. Jones and his partner purchased Sherwood

Plastics in 1989 and Mr. Jones became its

president. The company, which had operated as a

family-run business since its founding in 1966,

lacked budgets, sales staff, business and marketing

plans, engineering capability, and quality

assurance. The new president went to work in

sales. With a new sales force in place, he was

confident he could use his marketing skills to expand the product offering beyond the rotomolded plastic ductwork being manufactured

for the trucking industry. The new owners soon were considering manufacturing components for

11-167
other markets, such as health care (dentist chairs and raised toilet seat parts), boating (tanks), home

entertainment (outdoor speaker boxes), mailboxes,

and environmental products in addition to its

trucking industry-related products.

As planned, the business diversified its product

offerings. It introduced a new product reflecting

value-added operations —a completely

indestructible mailbox with the customer literature packed in individual cardboard boxes. Combining

value-added fabrication and assembly operations

with product-line diversification led to 50 percent

growth in 1992 and an additional 25 percent in 1993. Another basic strategy was to develop a quick-change job shop capability to react to

opportunities in any of the new markets. Yet, when new orders began to materialize and Mr.

Jones could justify expansion, he was unsure how

to proceed. Having no manufacturing engineers on

staff, he realized he needed to find a trustworthy

source for economical, cost-effective assistance.

Linking Up with the Lalce Erie MEP

Mr. Jones was aware of the Edison Polymer

Innovation Corporation (EPIC), a State of Ohio

Thomas Edison Center, which provides technical

resources to help polymer-related companies. His

first call to EPIC led to a referral to the Cleveland Advanced Manufacturing Program (CAMP),

another Thomas Edison Center dedicated to

helping small manufacturers become more

competitive. CAMP was formed in 1984 and, in 1989, expanded by creating a subsidiary called the Great Lakes Manufacturing Technology Center (GLMTC). GLMTC was one of the first three National Institute of Standards and Technology

(NIST) Manufacturing Extension Partnership

(MEP) Manufacturing Technology Centers (MTC). In 1992, CAMP formed a partnership

with the Edison Industrial Systems Center

(EISC)—a third Edison Center of which the Lake

Erie Manufacturing Extension Partnership

(LEMEP) is a subsidiary. Since Sherwood is

located within LEMEP's service region, LEMEP

assumed lead responsibility for assisting the firm.

Technical Assistance Provided

LEMEP received Mr. Jones' request in late May

1993. The request led to a plant visit on May 27, 1993. Dick Hanson, LEMEP's field engineer,

presented the center's capabilities while developing

a feel for the business and for Mr. Jones' vision of Sherwood's next 5 years. Within two weeks,

LEMEP presented a proposal, which drew in part on resources available at GLMTC.

Facilities Expansion Project. The ball was in motion. By July, LEMEP had developed a

footprint/concept for the company's expansion,

with construction to begin in October.

The 33,000-square-foot expansion doubled the

facility's size. It provided space for in-process

cooling for additional molding equipment,

consolidated off-site storage, and incorporated

just-in-time manufacturing concepts. The new

manufacturing layout completely rearranged

Sherwood's factory.

Benchmarking Projects. In November 1993, Mr.

Jones agreed with Mr. Hanson to benchmark his

business. Together they completed a QuickView

Plus Benchmarking, funded through LEMEP. The

resulting profile report benchmarked Sherwood

Plastics against established national and

international standards, and offered diagnostic

guidance and recommendations useful in outlining

a continuous improvement plan for the company.

At LEMEP, the field engineer is responsible for

facilitating the QuickView evaluation and

providing value-added input based on an analysis

11-168
of the QuickView report and on the knowledge

gained in a detailed plant tour.

In February 1994, on Mr. Hanson's recommendation, Mr. Jones agreed to complete a Performance Benchmarking in Plastics Processing

assessment. Developed by the NIST Midwest

Manufacturing Technology Center (MMTC) in Ann Arbor, Michigan, the benchmarking tool was made available to Sherwood through the LEMEP/

MMTC partnership.

Information Systems Project. On March 1, 1994, Mr. Jones requested help in developing a 12—18 month plan for Sherwood's information systems. Mr. Hanson and Mike Rastatter, GLMTC's

technical program manager, visited Sherwood and

met with Mr. Jones and Kelly Vekas, Sherwood's

secretary and treasurer. Mr. Rastatter presented a plan and proposal outlining a process and

engineering cost estimate for a new Information

Systems Acquisition and Implementation Plan. Mr.

Jones chose to fund the effort using internal

resources and a more cost-effective external

consultant.

Labor-Management Relations. In March 1994,

Sherwood was confronted with a successful effort

to organize the hourly workforce, during which

Mr. Hanson provided Sherwood with information on the following:

• Work In Northeast Ohio Council, a nonprofit organization whose mission is to

help business, labor, government, and

academia improve the economic climate and

competitive position of companies and

organizations.

• Schumaker, Loop and Kendrick of

Toledo, and Tim Mc Carthy, labor attorneys.

• Labor Management Citizens Committee

at the University on Toledo, and Joe Tomossie, executive director.

Space Utilization and Material Flow Projects. In June 1995, Mr. Jones called Mr. Hanson

requesting assistance. A large potential order had

recently been identified that could require an

additional roto-molding machine. Sherwood

management was also concerned about

manufacturing costs and identifying productivity

improvement opportunities (e.g., the use of a computer numerically controlled (CNC) machine

for de-burring/hole drilling of high-volume

repetitive parts and the use of time standards in

the molding operations). A proposal was prepared,

and Mr. Jones elected to fund a project to evaluate

space utilization and material flow in the new

building. Project deliverables included:

1) three to five alternative layouts, and associated

material flow diagrams; and

2) computer-aided design (CAD) drawings for placement and operation of an additional roto- molding machine. LEMEP hired a private

contractor to successfully perform these tasks.

Mold Defect Project. In the same time frame,

Sherwood was experiencing quality problems with one of its molds. In response, Mr. Hanson

arranged for assistance through the National

Center for Tooling and Precision Components

(NCTPC) in Toledo, Ohio. NCTPC provided

Sherwood with a coordinate measuring machine

analysis of the mold to resolve the quality

problem—a cost-effective solution.

11-169
Waste Reduction Initiative. In October 1995, Mr. Hanson contacted Mr. Jones to discuss the Waste

Reduction Technical Assistance Program funded

by a grant from the Ohio Environmental

Education Fund (OEEF) and the Ohio Department

of Development. Mr. Jones expressed an interest in knowing more about waste reduction. LEMEP

proposed a waste assessment of the South

Countyline facility to identify waste streams and

opportunities for cost savings in waste reduction. For a $600 investment, Sherwood received 10

practical profit improvement opportunities with a

projected total annual savings of $416,750.

Detailed suggestions were given for the following:

• The purchase and installation of equipment to permit purchasing resin in pellet

form for reduction to 35 mesh, as well as

reduction of scrap to 35 mesh for reuse within

the operation.

• A 10 percent reduction in electric demand, a 10 psi reduction in compressed air

pressure, and the purchase of natural gas on

the Spot Market.

Seven projects are realistic and planned for implementation in the short term.

Ongoing Initiatives

The latest vision LEMEP and Sherwood are

creating together is the use of employee

empowerment teams. Sherwood is experiencing

excessive employee turnover, and the market

dictates a low wage structure in a business

involving a relatively labor-intensive process. In

July 1995, Mr. Jones was receptive to establishing

employee teams using the Labor Management

Citizens Committee (LMCC) located at the

University of Toledo in Toledo, Ohio. LMCC's

mission is to guide unionized companies through a

process of setting up employee teams. The process

begins with an assessment to determine whether

the union and company leadership are ready to

accept the idea of delegating power to the work

force. If ready, a steering committee is formed and

trained through offsite formal training and by

visiting plants with successfully functioning

employee involvement teams. The steering

committee, consisting of four management and

four hourly representatives, then has the

responsibility of setting up factory teams to

address problems of productivity improvement

and successful company progression. Mr. Jones is

favorably evaluating the opportunity.

Changes in iVIanufacturing Capacity and

Practices

The projects that Mr. Jones, Sherwood's president,

and Mr. Hanson, LEMEP's field engineer, have

undertaken have helped improve both Sherwood's

overall manufacturing capability and many of its

specific manufacturing practices.

11-170
Changes in General Capabilities. Sherwood now

has:

• A manufacturing capacity to produce at

the $6-8 milhon sales volume level.

• The high-bay storage facilitates proper

curing of in-process material after molding

and before finishing operations. This process

step was missing in the old practices.

Quality has also improved.

• A diversified product-market mix.

• An information system capable of handling the increased customer base. ^

• A quality system with demonstrated

consistency.

• A manufacturing process capable of producing at the rate of $70,000 in sales per employee, up from approximately $50,000

prior to LEMEP assistance.

New Business Practices. The construction of the new facility allowed implementation of many of

the new business practices LEMEP presented to Mr. Jones.

• Over 1.5 million pounds of high-density

powdered or ground polyethylene per year is purchased and stored in the bulk storage

system recommended by the project.

Sherwood is saving $45,000 a year in raw

material costs alone.

• Material handling costs are down. For

example, the concept of a high-bay area for

staging in-process material was

incorporated for a cost-effective price, and is now providing invaluable storage space while

presenting customers with an excellent

impression of an organized facility.

• Process operations have been

consolidated in the new facility, reducing

material handling and the cost of

transportation to and from an offsite warehouse.

• The use of work cell concepts has vastly

improved work force productivity.

• Although Sherwood chose an alternative

product, the detailed information system

discussion and proposal were helpful in guiding the internal project.

• Sherwood is working on preparations for

full QS-9000 registration using internal

resources—also a 1993 QuickView Plus Benchmarking recommendation.

Business Benefits to the Company

Sherwood has benefitted from the changed

business performance. From 1993, the year LEMEP assistance began, to 1995, sales increased from $3.5 million to $6 million, a sales volume

that would have been unattainable had the firm continued to operate in its older, smaller, and less

productive facility. The $2.5 million increase in

sales at an estimated 25 percent incremental

contribution margin yields $625,000 in

incremental income. Added to this benefit are reduced material costs and a $540,000 gain from

greater employee productivity, for a total

annualized cost benefit of $1.2 million (see Table

11-171
1, Summary of Annual Cost Benefits). That total

represents 20 percent of sales—the difference between a break-even or loss business and a

profitable business on a world-class track. Its former operating performance led to Sherwood's

sale. The improved operating performance will

lead to continued growth.

Moreover, Sherwood anticipates an additional $107,750 in savings from seven of the 10 LEMEPproposed waste reduction projects. (See Table 2, Summary of Waste Reduction Savings). The

company projects these seven initiatives will cost approximately $102,000; thus, the payback on

this investment will be less than a year.

Other tangible (though unquantified) benefits have

resulted from Sherwood's enhanced product

quality. In 1991, a major customer, Navistar

International Transportation Corporation, gave Sherwood four months to prepare for a quality

audit. At that time, the new quality control manager had just begun to build a plan. Sherwood

barely passed Navistar's initial audit. Now,

Sherwood proudly presents its quality system and

record. More recently. Temple Products Company

of Cleveland switched suppliers because of a

quality problem associated with its boat gas tanks.

Since 1994, when Sherwood took over the

business. Temple has not had a quality problem.

Sherwood's growing reputation for quality

production augurs well for its future growth

potential.

Public Benefits

The public benefits are basic. There are 86 people

employed in a town hit hard by defense downsizing. At least 20 employees are associated with the expansion project, and the business is now successfully operating in competitive markets

during a period when external market conditions have caused a decline in the trucking market. Furthermore, Sherwood has been able to maintain

its employment level and continue to contribute to

the community of Fostoria, Ohio.

In January 1994, Mr. Jones and Sherwood Plastics were recognized for their contribution in the Entrepreneur of the Year program: "We hereby

recognize Sherwood Plastics for their exceptional

commitment to the economic development effort

of the Fostoria area."

The combined efforts of companies like Sherwood

have led to a situation in which the 1996 rate of unemployment in the Fostoria area is in the three

to four percent range—a nice problem to have!

11-172
Table 1

Summary of Annual Cost Benefits

Year Sales Ll 1 ipiuycco odics/ tmpioyee Comment/Annual Cost Benefit

1989 $3.0 MM

1990

1991 $1.87 MM

1992 $2.81 MM

- 50% Sales increase

1993 $3.51 MM 66 $53,000 25% Sales increase

1994 $45,000 in bulk purchase of raw materials

1995 $6.0 MM 86 $70,000 $540,000 in employee productivity

1995 \}^\J^\J "RfiP^ ^\J\J\J OOn inIII inrrpmpntfll lll^ldlldl icii

contribution margin

1995 $1,210,000 in realized annual

benefit

Producing $6 million in sales at a productivity of $53,000 in sales per employee would require 1 13 people instead of

thie 86 employees on staff in 1995. The 27-employee savings at an estimated annual cost of $20,000 eacfi would

yield $540,000 in productivity savings to ttie company

Table 2

Summary of Waste Reduction Savings

Cost Element Process Change Cost Savings Capital Cost

Electricity • Control demand—reduce 1 0% $2,500* $960

Powder weighup • Replace paper bags $1,400* $750

Powder weighup • Avoid paper bag loss/replacement $350* included above

Labor • Operate roto-mold machine with one person$273,000 $250,000

Resin • Buy pellets and pulverize $52,500* $100,000

Recycle scrap • Pulverize scrap and reuse in process

$45,000* included above

Natural gas • Reduce oven heat loss with redesign

$9,000 $15,000

Labor • Oven redesign to simplify load and

unload

$27,000 included above

Natural gas • Purchase gas in bulk on the spot market

$5,000* $300

Compressed air • Reduce shop air pressure

• Total

• Total savings judged real Shenwood

$1,000*

$416,750

$107,750*

$100

$367,110

$102,110*

* The asterisk identifies those projects judged realistic by Mr. Jones.

11-173
Table 3

Summary of Benefits to Sherwood

Implemented projects savings $1,210,000.00

To be implemented $107,750.00

TOTAL 1,317,750.00

Cost to Sherwood for LEMEP services for all projects $20,950.00

Benefit to Sherwood for every dollar invested in LEMEP

$63.51

11-174
CHRONOLOGY OF SERVICES

Cost to Sherwood

June 10, 1993 • The Facility Expansion Project $14,800

November 5, 1993 • QuickView Plus Benchmarking $0

August 10, 1995 • Additional Rotational Molding Machine Project $5,550

January 25, 1996 • Waste Reduction Report $600

Total Cost to Sherwood for All Projects $20,950

11-175

Case Study

TIMBERLYNE CABINET COMPANY

Angier, North Carolina

NORTH CAROLINA MANUFACTURING

EXTENSION PROJECT

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by:

Shelia A. Martin

Research Triangle Institute

Research Triangle Park, N.C.

and

Krista Johnsen Leuteritz NIST MEP

Gaithersburg, Md.

11-177

A S E STUDY

Timberlyne Cabinet Company

Timberlyne Cabinet Company produces frameless wood cabinets at its plant in Angier, North

Carolina, just south of Raleigh. The plant, which

opened in 1986, currently employs 32 people and

has annual sales of about S5.5 million. Over the past several years, Timberlyne has automated its

operations, thereby reducing the number of employees required to produce its products.

The company's market niche is in frameless

cabinets with a high-quality, durable finish. Its main customers are small kitchen and bath dealers along the East Coast. Timberlyne's market reaches from Pennsylvania to Georgia, with the largest customer base residing in North Carolina, South

Carolina, and Virginia. In the past, customers have

included large general contractors; however, the company has shifted to the kitchen and bath

dealers' market because it is a more stable source

of business.

Timberlyne has differentiated its products in

different ways over the years. Because frameless

cabinets use less lumber than framed cabinets, the company has, in the past, emphasized

environmental concerns, along with cost, as a marketing strategy. More recently, however,

Timberlyne has emphasized its superior finish. The

ultraviolet (UV) curing process used on its products produces a very durable finish that is

resistant to abrasion, water, steam, chemicals, and

stains, and also is washable. Timberlyne is one of

three wood cabinet companies in the United States using sprayed, UV-cured finishes on its cabinets and the only wood cabinet company using

pigmented sprayed, UV-cured finishes. Thus, the UV curing process is an important part of Timberlyne's competitive strategy.

By automating and heavily marketing their unique

product, Timberlyne expects to expand their market sufficiently to open a new plant.

Timberlyne currently operates a single plant in

Angier, North Carolina, and plans to open a plant

in Kentucky. Initially, this plant will produce about

the same volume as the North Carolina plant;

Timberlyne eventually plans to expand operations

at the Kentucky plant to five times the current volume of the North Carolina plant. The

Kentucky plant will serve many potential customers in Kentucky and Tennessee, and, in

addition, be but a 1-day trip by truck from most

customers in New England, New York, and

Boston.

Within the 37,000 square foot plant, the employees of Timberlyne perform, among other

functions, the following processes at the

workstations:

• Cut 5x8 sheets of medium density

fiberboard (MDF) into appropriate sizes

• Machine and drill the MDF

• Edge, bore, and sand the MDF

11-179
• Spray paint some items in a conventional

spray paint booth

• Load parts into the Venjakob UV spraying

and curing line, which reads the size of the

parts, cleans and deionizes the parts, sprays

the coating onto the parts, bakes them in a hot water oven, and finally cures the finish under UV lights

• Assemble and pack cabinets

Technical Assistance Areas

Timberlyne Cabinet Company called NCMEP for

help with four different technical issues:

• Inconsistent finish quality on products

processed in the spray paint booth

• Unacceptable performance of UV-curable

coatings used in its UV curing process

• Unacceptable properties and cost of its MDF supply

• Environmental permitting issues related

to airbag return air

Table 1 summarizes these issues and their

implications for the plant's performance.

Spray Paint Booth. Timberlyne was having trouble

achieving an even application of paint in its spray

paint booth. A great deal of dust and overspray was settling on the pieces being sprayed, causing

lumps and bumps in the finish. Almost every piece

painted in the booth had to be resprayed

(sometimes four or five times). The problem had

been recurring for approximately 6 months.

Because the spray booth was used only for low- production items (large-volume products were

painted m the Venjakob coating/curing line), the problem had not been solved, although the plant was still operating.

The problem with the spray paint booth was

becoming a serious nuisance and eroding the

plant's productivity. Because many of these products had to be reworked so many times,

significant capital was tied up in work-in-process

inventory. These low-production items were taking

a long time to complete successfully, and the

inconsistent finish and long delays resulted in the

loss of several customers.

UV Curing Process. In February 1995, Timberlyne

purchased a Venjakob coating/curing line from

European Woodworking Machinery, an Austrian

firm. This equipment, costing $500,000, used a UV curing process, which employs a UV light to cure a coating onto a surface. However,

Timberlyne was unsuccessful in getting the UV

process to work properly. It was using a low-VOC

coating that did not properly adhere to the

surface. Even after a number of visits by the

coating vendors, no solution emerged.

While trying to solve this problem, Timberlyne

used the new spraying and curing line with its high-VOC (acid-cured) coatings. Because the equipment and plant layout were designed to work

with the low-VOC, UV-curable coatings, the use of high-VOC coatings caused indoor air quality

problems and discomfort for workers. This use

also caused failure of belts on the paint spraying

line. The belts normally last for two years, but Timberlyne had used five belts in less than one

year.

11-180
Table 1

Description of Teclinical Issues and Their Implications

Technical Issue Brief Descriprion of Impact of Problem

Problem

1 . Spray Paint Booth Items painted in spray booth had bumps and lumps

2. UV Curing Process

3. MDF Properties

suddenly changed

4. Airbag Return Air

Could not find a coating that would work properly with the UV curing process; used high-VOC coatings with equipment designed for low -VOC coatings

Old supplier of MDF

material cost

formulation and primer would not adhere properly; new supplier more than

three times as expensive

Airbag return air could not be vented to outside without environmental permit; if vented to inside in summer,

caused severe worker

discomfort due to heat

Almost 100 percent of product had to be reworked, sometimes four to five times

Work-in-process inventory piled up

Inconsistent finish quality

Delay in order turnaround

Machinery did not work properly

Belts wore out

Indoor air problems

Inconsistent finish quality

Use of Canadian supplier tripled raw

Use of original supplier required

adding a sizing, sealer, and two

sanding steps to process

Title V permit could cost at least $5,000, plus administrative costs

Exploring feasibility of cooling airbag

return air prior to venting to inside, which would require expensive

changes to ventilation system

Two of the belts were damaged by the installation

crew, so at least two belts, at $4,000 each, were

lost due to use of acid-cured coatings with

machinery designed for use with UV-curable

coatings.

Because Timberlyne experimented with a variety

of UV coatings, they expect to have trouble in the

future matching colors that were applied to

cabinets during this period. Finish quality was also

inconsistent and customers complained.

Timberlyne had virtually given up on the low- VOC process. It was aware of another company

that tried to implement a similar technology a few years ago and failed. Assuming it had also

failed to successfully implement this technology,

Timberlyne asked NCMEP engineers for help in

reconfiguring the plant to more efficiently use the high-VOC coating process, given the existing

equipment.

11-181
MDF Properties. Timberlyne also was having a problem with the MDF used in the construction of

its cabinets. Before calling NCMEP, Timberlyne

found that its original U.S. supplier of MDF

changed its formulation, and the new formula

caused problems with primer adhesion.

Timberlyne had to change its production process from a two-step process (apply primer, then

topcoat) to a six-step process (apply sizing, sand,

apply sealer, sand, apply primer, apply topcoat).

These extra steps cost a great deal of labor time. In

addition, the nitrocellulose sizing, which was not

used in conjunction with the old MDF

formulation, added to the materials cost per

cabinet.

Timberlyne's initial solution to this problem was

to find another MDF supplier. Its new source was

a Canadian firm, and although the MDF

functioned properly, the price was greater than

three times that of MDF purchased from the

original supplier. This short-term solution cost Timberlyne a great deal, so the company hoped

NCMEP could uncover an alternative source of MDF that met both cost and performance

requirements.

Airbag Return Air. Timberlyne had a problem

with venting airbag return air within the plant,

which affected the comfort and productivity of workers. This exhaust air, which is first filtered to remove wood particles, is very warm and, when

vented inside the plant on hot summer days,

caused a severe heat problem. The plant manager

had been told that, to legally exhaust the air to the

outside, he needed an expensive Title V air permit.

Although the filing fee for the permit is $5,000,

the plant manager believed that other costs,

including the time required to develop the permit,

keep records, and accompany inspectors, would

result in a far greater total cost. The plant

manager wanted to find an alternative to filing for

the permit and asked the NCMEP engineers to help find a way to cool the exhaust air so that it could be vented to the inside without causing a problem for workers.

Technical Assistance Provided

Jim Jensen, the Timberlyne plant manager, first contacted NCMEP on August 2, 1995. NCMEP

completed the assistance by September 14, 1995. The Chronology of Services shows the timeline of

interactions between NCMEP and Timberlyne

Cabinet Company.

Mr. Jensen called the NCMEP because he had a

positive experience with the North Carolina

Industrial Extension Service (NCIES)—the parent

organization of the NCMEP—a few years earlier. At that time, Timberlyne was expanding its plant.

The NCIES conducted a plant layout project, and

Mr. Jensen was very satisfied with the assistance he received. This positive experience led Mr.

Jensen to call Bob Edwards, NCMEP's director, in connection with the spray paint booth problem on

August 2. Mr. Edwards talked with Mr. Jensen and

started the assistance process.

A series of contacts followed. Mr. Edwards

assigned the case to Joseph Davis, one of NCMEP's extension specialists. Mr. Davis

returned Mr. Jensen's call and gathered more

details about his technical problems. Also, Mr. Davis initiated background literature searches. Mr. Edwards put together a site visit team, which

included Mr. Edwards, Mr. Davis, Steve Walker,

and Rich Clinton. Mr. Walker is a furniture

engineering specialist, and Mr. Clinton is a manufacturing specialist. The team conducted the

site visit on August 9.

11-182
Mr. Walker and Sholeh Azar, an environmental

permitting expert, conducted a follow-up site visit

to address the airbag return air issue.

Mr. Davis coordinated the follow-up activities. He

and other members of the site visit team

researched Timberlyne's technical problems and

discussed proposed solutions. To address the third problem, the MDF properties, the NCMEP

consulted both the Polymers Extension Program

(PEP) and the NASA Marshall Space Flight Center. On September 14, Mr. Davis sent a letter to Richard Gambill, Timberlyne's president,

summarizing the solutions to each problem and

inviting requests for further assistance. NCMEP

provided assistance and advice that contributed to

solutions to these problems.

Timberlyne also initiated a number of activities

that directly contributed to solving the problems,

both in conjunction with and independently of the

advice provided by NCMEP.

Spray Paint Booth Modifications. Timberlyne's

problems in its spray paint booth had been

recurring for 6 months. It had tried a number of

different duct work configurations, but could not seem to effect a satisfactory solution. The

company also worried that reducing the air volume too much would violate OSHA

regulations. During their visit to the plant, the NCMEP engineers watched as the spray paint

booth was operating. They noticed two problems.

First, Timberlyne's employees could not properly

regulate the positive airflow required in the paint

booth. In particular, the air curtain they were

using to maintain this positive air pressure was

too strong, causing a draft in the booth. Second,

filters in the rear of the booth clogged with paint

over time and made it difficult to maintain the

required positive air flow in the paint booth,

compounding the problem.

To solve these problems, NCMEP agents

recommended a baffle on the inlet air to regulate

the positive air flow and a diffuser to make the air flow less direct. To prevent swirling and

backspray within the booth, which caused rough

paint application, NCMEP agents recommended

extending the exhaust plenum in the back of the

paint booth to cover its entire length. Timberlyne's own maintenance staff performed this repair for about $45 in materials and about 8 hours of

labor.

Search for Suitable UV-Coating Recommended.

Timberlyne decided to try the UV-curable coatable

process after attending the National Kitchen and

Bath show in New Orleans in April 1995. Timberlyne invested $500,000 in the UV-curable

line and was fairly committed to the process because of its reputation for superior

performance. However, after all of the problems it had trying to find an appropriate coating,

Timberlyne was at the point of deciding to retrofit

the plant, convinced that it should give up on

ultraviolet-cured coatings. After talking with

NCMEP, however, the company continued to work with vendors to find a suitable coating and

eventually was successful.

11-183
Before conducting a site visit, Mr. Davis contacted

Carolina Power & Light Electrotechnologies for

information on the UV curing process and

initiated a literature search on UV coatings.

During the August 9 site visit, he provided Mr.

Jensen, the plant manager, with two journal

articles about UV curing and the names of three

potential suppliers of appropriate coatings. He

later sent two other journal articles explaining the UV curing process and its benefits.

After touring the plant, conducting some

background research, and talking with

Mr. Jensen, the NCMEP agents advised him that

the best solution was to continue to search for a

suitable UV coating rather than to retrofit the

plant to use high-VOC coatings. Because the

spraying equipment and ventilation system were

originally designed and installed for low-VOC UV

coatings, it would be prohibitively expensive to

retrofit the facility for high-VOC coatings. Mr.

Davis encouraged Mr. Jensen to continue to work

with various coatings vendors to find a suitable

formulation. In doing so, he emphasized the

benefits of the UV technology, including the

virtual elimination of high-VOC solvents from the

coating process.

Problems Resolved with MDF Board. NCMEP

manager Mr. Edwards conducted several activities

to investigate this problem. First, he sent a sample

of the failing MDE to the PEP in Charlotte for a

review. The PEP determined that the problem was

outside their expertise. Next, he initiated technical

assistance from NASA through Byard Houck of

the NCIES and Sammy Nabors of the NASA

Marshall Space Flight Center. NASA tested

samples of the MDF board and identified the problem. They arranged a three-way conference

call between Mr. Jensen, Mr. Davis, and Roger

Black of the NASA Technology Utilization Office. They explained to Mr. Jensen that the problem was with the board formulation and invited the

vendor, Georgia-Pacific, to consult with them

about fixing the problem with the board. Armed

with the technical information he received from

NCMEP, Mr. Jensen continued to ask GeorgiaPacific to make the required changes until the problem was resolved. Georgia-Pacific did deliver

a better product. Although Georgia Pacific may

have eventually switched the formula without

MEP intervention, the advice provided by the MEP hastened this process.

Application for Less Expensive Permit Advised.

After researching the issues, Mr. Azar and Mr. Walker advised Mr. Jensen that he could apply for

a federally enforceable permit with a provision

allowing for seasonal discharge, rather than

applying for a Title V permit. This permit can be

filed for a fee of $250, rather than the $5,000 fee

required for the Title V permit, and requires less

administration and recordkeeping than a Title V

permit. This permit eliminated the need to install a

cooling device in the ventilation system.

Timberlyne opted to apply for the less expensive

permit.

Changed Manufacturing Practices and

Related Outcomes

Timberlyne made several changes in its manufacturing practice as a result of NCMEP's

assistance. Table 2 summarizes these changes and

11-184
the resulting changes in capability, technical performance, and business outcomes. First, Timberlyne reconfigured the spray paint booth as NCMEP suggested, resulting in the most dramatic

change to their manufacturing practice—the

virtual elimination of rework from the spray paint booth. Second, Timberlyne is now using a UV

coating that provides a quality finish with the UVcurable process. Third, the company is using a less expensive source of MDF that does not require the

six-step process described above. Finally,

Timberlyne is not venting any airbag return air to

the inside, except in winter, and has not had to file

for a Title V air quality permit.

Improved Spray Paint Booth Process. As shown in Table 2, NCMEP's recommendations to Timberlyne regarding the spray paint booth

allowed Timberlyne to paint without paint

swirling, dust, and backspray. This change led to a dramatically improved technical performance:

with doubling of throughput in the spray paint

booth and the elimination of rework. Before

correcting the problem, Timberlyne workers could

paint approximately 30 doors per hour and had to

paint every door about four times; now that number is up to 62.5 doors per hour, repainting

only 10 percent of the doors one time. According

to company estimates, Timberlyne saves $1,157.33 per 1000 doors in labor costs.

Annually, Timberlyne paints 75,000 doors in the

spray booth for an annual savings of $86,800. By

reducing rework, Timberlyne also reduced its

materials costs (no quantitative estimate was

developed for the materials savings).

Commitment to UV Curing Process. As a result of

using the UV-curable coatings, Timberlyne has experienced the following outcomes:

• Improvement of product quality leading

to reduction of customer reject rates, expanded customer base, and an enhanced

reputation

• Elimination of indoor air problems

• Reduction of belt-changing intervals

• Improvement of on-time delivery

• Avoidance of additional capital costs for

retrofitting the plant to work with highVOC coatings

• Reduction in labor and materials costs

• Elimination of solvents from the coating

process for parts painted on the UV- curable

line, leading to significantly improved

environmental performance

It was possible to quantify the savings resulting

from some of these factors.

Materials Savings. UV coatings have a much

higher transfer efficiency than high-VOC coatings

(more pigment reaches the product); thus, much

less material is used. UV coatings have an 80-

percent transfer efficiency, while VOC coatings

have a 25-percent transfer efficiency. Furthermore,

the UV-curable coatings do not require a primer.

Thus, before Timberlyne began to use the UVcurable coating, each part had

11-185
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11-186
to be painted seven times (primer front and back;

three topcoats on the front; two topcoats on the back); with the UV-curable coatings, only five

coats are required.Thus, the increase in transfer

efficiency and the ehmination of the primer coat more than make up for the increased per-gallon

cost of the UV coating. Annual savings are about

$177,200.

Savings on Belts. Timberlyne replaced the belts on

the UV spraying/finishing line five times in 6 months. These belts, which cost $4,000, normally

last 2 years. Two of the belts were damaged by the equipment installation crew, but the rest were from stress related to using acid-curable coatings.

Total annual savings are $22,000.

Labor Costs Savings. Mr. Jensen has reduced his

labor costs a great deal since purchasing the UVcurable line. However, most of these labor savings

are not attributable to the NCMEP because they

would have occurred regardless of whether the automated UV spraying/curing line was used with

UV-curable or with high-VOC paint. However,

once the finishing line was working properly with

the UV-curable coatings, Timberlyne did decrease

the number of finishers required from four to one. The remaining person working the UV-curable line

earns a higher salary because this job requires

greater skill and knowledge of the equipment. The

annual labor savings total $56,000.

Elimination of Solvents. A typical acid-cured

catalyzed top coating has a VOC content of about

5.1 pounds per gallon. Before switching to UVcurable coatings, which contain no VOC solvents and are applied as 100 percent solids, Timberlyne

was using about 896 gallons of acid-cured coatings

per week. By switching to UV-curable coatings,

Timberlyne has eliminated emissions of 4570

pounds of VOCs per week, or 228,500 pounds per

year.

More Cost-Effective MDF Supplier. We can

calculate the savings due to finding an MDF

supplier that meets Timberlyne's needs in two

ways. The first (and simplest) way is to calculate

the difference in the materials cost between the

high-priced Canadian producer and the U.S. producer they are currently using. Savings from

using the lower-priced board total $101,120.

The second way to calculate these savings would be

to consider the labor and materials costs required

to make the original MDF (from the original U.S.

supplier) perform properly. To use the

original MDF, Timberlyne had to use a six-step

method: size, sand, seal, sand, prime, and topcoat.

Now that they have solved the problem and found

a board that performs properly, they only need to prime and topcoat. Although we could calculate

the labor cost of these additional steps, Timberlyne

originally solved the problem by finding the Canadian source of MDF that functioned properly.

Therefore, we attribute to NCMEP's assistance

only the difference in cost between the Canadian

MDF and the lower-cost MDF, both of which

worked properly.

Airbag Return Air Problem Resolved. There are two ways to calculate business outcomes from

solving the airbag return air problem. First, the

permit filed by Timberlyne cost $4,750 less than

the Title V permit it thought was necessary. Second,

11-187
is through avoided capital cost. Mr. Jensen said he was opposed to fihng for a Title V permit and was

planning, instead, to install a cooling system that he estimated would have cost between $8,000 and

$10,000. .

Public Benefits

Several public benefits from this assistance are worth noting:

• By using the UV-curable coatings,

Timberlyne has reduced its VOC emissions by

about 228,500 pounds per year

• Timberlyne has improved working

conditions due to: — decreased VOC emissions — reduction of time workers

spend in the paint booth — reduced heat in the plant

during summer

• The average wage of employees

working on the painting line is higher, because

it is a higher skill job

• By using a U.S. rather than a Canadian

source of MDF, Timberlyne is indirectly

contributing to the prosperity of the U.S. wood products industry

Competing Explanations

This section describes alternative explanations for changes in outcomes that occurred after NCMEP's

assistance.

Outside Expert Intervention. Without NCMEP,

Timberlyne may have continued to try

unsuccessful approaches to solving the spray paint

booth problem. Eventually, it may have found a contractor or outside expert to identify the problem and develop a solution. Estimating how

long this might have taken without NCMEP's

assistance is difficult.

Similarly, before getting NCMEP's advice,

Timberlyne planned to continue venting the airbag

return air to the inside because it did not want to obtain a Title V permit. It had planned to solve the problem by cooling the air within the ventilation

system. Timberlyne may have learned of the

special permit from another source, but they may

have learned of it too late—after already making

improvements to its ventilation system. These

changes may have cost Timberlyne not only the

initial investment required to install the ventilation

system, but also the additional energy required to run it.

Timberlyne's Commitment to UV Curing Process. Timberlyne decided to adopt the UV process early

in 1995. Although fairly certain that it wanted to

use the UV process, Timberlyne could not find the

material that would work with it. Jim Jensen

stated that, in time, the company may have found

an appropriate coating, even without the information NCMEP provided, but had reached a

point at which it was questioning the decision and was prepared to retrofit the plant for the other

type of coating. By convincing Timberlyne to continue to pursue a UV coating, MEP prevented

the company from retrofitting the plant, which

would have been costly and would have had

negative environmental implications.

Likelihood ofReformulated MDF. Georgia-Pacific

may have developed the reformulated MDF board

anyway, even without the input of the NCMEP

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and NASA, although it is unclear whether

problems would have been resolved as quickly.

NCMEP provided technical information that encouraged Jim Jensen to continue working with

Georgia-Pacific to test samples and resolve the problem. The reformulation process may have

taken longer without this assistance. Furthermore,

Timberlyne may not have known when GeorgiaPacific changed the formulation and may have

continued to use the Canadian supplier .

unnecessarily.

Summary

Timberlyne Cabinet Company contacted the NCMEP to ask for assistance in solving problems

with four processes: its spray paint booth, its UV

curing process, the properties of its MDF board,

and its airbag return air. NCMEP was able to help

Timberlyne solve each of these problems.

Timberlyne has changed a number of its practices

as a result of NCMEP's assistance. The company

has reconfigured its paint booth according to NCMEP's recommendations; it has discontinued

its plans to return to high-VOC coatings, because

it found a coating that works with their UV curing

process. Timberlyne discontinued using the

expensive Canadian MDF supplier because

Georgia-Pacific has developed an MDF that solves

the company's adhesion problems. Finally, it is

venting airbag return air to the outside in the summer.

Some of the technical and business outcomes of

these actions are quantifiable. Annual savings

totaled $443,120 for all outcomes. Timberlyne

also enjoyed a one-time savings of $4,750 for its

air permit. In addition, the company has

eliminated 228,500 pounds of VOC emissions per

year.

Other, nonquantifiable impacts include:

• A higher-quality finish on its cabinets

• Elimination of indoor air problems

• An improvement in reputation with its

customers

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CHRONOLOGY OF SERVICES

August 2, 1995 • Jim Jensen, plant manager, called Bob Edwards to request

assistance. August 3, 1995 • Joe Davis returned call to get a better idea of the problem;

made appointment for site visit on August 9, 1995. August 7, 1995 • Joe Davis contacted CP&L Electrotechnologies for information on the UV curing process. Initiated a literature search on UV

coatings.

August 8, 1995 • Joe Davis prepared for site visit. August 9, 1995 • Site visit, included Bob Edwards, Joe Davis, Rich Clinton, and

Steve Walker. August 22, 1995 • Steve Walker and Sholeh Azar visited Timberlyne to consult about the environmental issues. August 29, 1995 • After some research and analysis, Joe Davis called Jim

Jensen to explain UV and painting corrections. August 31, 1995 • After PEP and NASA review, Joe Davis called Jim Jensen to

advise on MDF solution. September 11, 1995 • Rich Clinton developed notes about the environmental

solution, talking with Sholeh Azar. September 14, 1995 • Joe Davis sent a letter to Richard Gambill summarizing the

solutions and inviting requests for future assistance.

*

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Case Study

TRIDENT, INC.

Brookfield, Connecticut

CONN/STEP

an affiliate of the Manufacturing Extension Partnersliip

November 1996

Prepared by:

Tab Wilkins CONNSTEP

New Britain, Conn.

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A S E STUDY

Trident, Inc.

Trident, Inc. (Trident) designs, manufactures,

and markets impulse ink jet subsystems,

including printheads, inks and other consumables, to the industrial market. Trident's

proprietary products are used for a variety of

printing applications which require high speed,

good printing quality, durable equipment, and

the ability to change the printed text or pattern

frequently. Trident's Ultrajet printing subsystems

are marketed worldwide, primarily through more than 70 original equipment manufacturer

(OEM) customers who integrate them into

computer-controlled, application specific

products that are then sold to end-users. Its

contracts with OEM customers also provide for ongoing sales by Trident of consumables,

consisting principally of inks and printing

subsystem components. Trident's net sales have

grown from $6.4 million for the 12 months

ending December 31, 1991, to $17.3 miUion for

the 12 months ending September 30, 1995

("Fiscal 1995").

The Market

The largest application for Trident's products is

carton coding, which involves printing directly onto shipping cartons. Carton coding systems

incorporating Trident's products allow end-users

to print any combination of high-quality text,

bar codes, and graphics directly onto blank

cartons as they move down an assembly or production line. Trident's products permit

frequent changes, even carton by carton, of this

information. This capability eliminates the need to maintain a substantial inventory of preprinted

cartons or labels, reduces production time and

costs, and allows frequent changeovers between

products. Other current industrial applications for

Trident's products include check coding, addressing

and business forms imprinting, postal bar coding,

stamp cancellation, and garment pattern plotting.

Problem Identification and

CONN/STEP Assistance

The company was originally contacted in August,

1994 by a "cold call" from Dale Derrick, the

regional Field Engineer. At the time, it was clear

that the company was very aggressive in developing

its product and product technologies.

Trident's in-house engineer oversaw day-to-day

operations, but could not also meet the demands to expand and accommodate Trident's high growth.

Two issues were initially identified with the Field

Engineer: 1 ) modifying plant layout to accommodate expansion needs in ink production;

and 2) introducing work cells to improve workflow on the printer head line.

Plant Layout Project. Trident's growth had forced

it to develop increased production capability within

its current buildings and floor space. The company

had two buildings, one housing its R&D

operations and the other its manufacturing

operations. Trident thought that their growth could

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be accommodated by moving ink production,

along with some associated departments, into the R&D building. These relocated manufacturing

processes would take over space freed by reduced

inventory and improved workflow.

The CONN/STEP Field Engineer's role was to help

Trident locate the external expertise needed to conduct the study and develop a new layout. In March 1995, Trident elected to work with

Fraunhofer Institute, one of several consultants Mr. Derrick identified and interviewed along with

Trident.

Introducing Work Cells. A second project,

initiated in April 1995, sought to expand the use

of work cells throughout the ink jet printer head

line. In January 1995, the company had

experimented on its own by setting up one work

cell in the Calibration Test Department. Working

with four people in a cell environment, Trident was able to cut the calibration time from 4 weeks

to 1 day.

With the success of one cell so evident. Trident

wanted to adapt the cell idea across all parts of the

department. However, the company's limited

engineering staff did not have the skills or time to demonstrate the new technique to shop floor

employees, educate them in its operation, or develop their "buy-in" to the change. Successfully

accomplishing these tasks was essential to expanding the experiment to the three other

calibration cells.

CONN/STEP again helped to locate appropriate

outside experts who could work with Trident and

their employees in setting up the additional cells,

and, more importantly, understanding the benefits

of this approach. Trident selected Value Added

Associates to assist with operationalizing the new

cells, and, ultimately, switching the company from

a "batch" processing mode to a "one piece" flow

mode in the calibration department.

The company, in concert with adoption of the work cells, is implementing an increased pay scale based on job certification. As workers increase the number of jobs they are certified to work within a

cell, their pay increases accordingly.

Changes in Practice

By August 1995, Fraunhofer developed a recommendation for a layout of ink production

activities in the R&D building. Between $100

$125,000 was spent in renovations and capital

equipment, and the new installation was

completed and up and running in September 1995. The changes resulted in a new workflow,

improved throughput, and reduced inventory.

The four work cells were up and running in the

ink jet printer head department as of October

1995. Through the support of Value Added

Associates, the employees began operating on a

self-directed basis, setting up and running work

cells on their own. Through the use of cells,

Trident doubled the department's throughput rate. The project also has transferred the setup and

management capabilities for work cells to the shop

floor.

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Resources Committed. The Field Engineer,

through August 1995, had spent a total of 82

hours with the company working to identify

consultants, helping Trident with their review

process, and getting these two projects successfully

completed. During this time, the Field Engineer

had also been working with the company on a

third project to help automate certain parts of the

ink production line.

Between Fraunhofer and Value Added Associates,

a total of approximately 300 hours in outside

consulting expertise had been invested. The total

cost of this outside expertise was $20,000.

Changes in Performance

The improved ink production layout allowed

Trident to reduce its work in progress from $1.6

million to approximately $800,000 within 2 months. The cycle time for ink jet head printer

calibration fell from four weeks to one day, further

decreasing inventory needs. In addition. Trident is responding much more quickly to quality issues,

correcting newly discovered quality problems in a

day.

The company has been able to increase overall production by 25—35 percent a year without any

significant addition of direct labor, thus improving

Trident's position in the marketplace significantly.

However, it has been adding engineering staff, six

in the last year, to begin dealing with a number of

technical issues in-house. CONN/STEP's role in

the future is expected to focus on product

development. This assistance will include helping

Trident take advantage of federal laboratories,

universities, and private resources in

Connecticut.

Company-Initiated improvements

Trident initiated the experiment into work cells on

its own. Its staff had visited two companies that had introduced work cells, one on the recommendation of the CONN/STEP-associated

consultant. Trident also understood that a plant

layout and improved workflow could reduce their

overall costs.

Without CONN/STEP, Trident might have

introduced some of these actions on its own;

however, by its own accounting, the company

believes it would have been at least a year later.

Additionally, it believes it would have made

significant mistakes, mistakes which might have

greatly extended this timeline and retarded the

firm's growth.

Public Benefits

In the short-term, several construction jobs were

created as the R&D facility was renovated, and new capital equipment purchased and installed,

and, as noted, six longer-term engineering

positions have been created. The substantial

savings in production costs will allow the company to remain a strong competitor in the marketplace and to continue to meet their growth

needs. Already, Trident's improved performance

has generated additional corporate and income

taxes, and its sound future prospects hold the promise of further increases.

Finally, the company's workers are upgrading their

skills through the work cell pay certification

process. The increase in skills has allowed workers

to receive increased wages, while solidifying the company's reliance on their Connecticut

workforce.

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CHRONOLOGY OF SERVICES

August 1994 • Field Engineer Dale Detrick contacts Trident through a cold call.

January 1995 • Three plant layout consultants were interviewed and Fraunhofer

selected to undertake the study.

January 1995 • Trident experiments with setting up one work cell in the Calibration

Test Department.

March 1995 > • Trident begins working with Value Added Associates for on-going

support to help expand the use of work cells.

June 1995 • Initial plant layout recommendations made.

August 1995 • Renovations in new plant layout completed.

September 1995 • All new capital equipment installed and the new plant line up and

running; initial savings recognized.

October 1995 • Expansion of work cells reaches four areas; a 30 percent reduction in

inventory and a doubling in production achieved.

November 1995 • Beginning of additional work in product development assistance.

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Case Study

WALKER SYSTEMS, INC.-

Parkersburg, West Virginia

THE WEST VIRGINIA PARTNERSHIP

FOR INDUSTRIAL MODERNIZATION

an affiliate of the Manufacturing Extension Partnership

November 1996

Prepared by: Lawence D. Dixon

The West Virginia Partnership for

Industrial Modernization

Montgomery, W.Va.

11-197

S E STUDY

Walker Systems, Inc.

Walker Systems, Inc. (WSI) is a nationally

recognized manufacturer of power, lighting,

electrical, and communications distribution

systems for the non-residential construction

industr}'. Located in Parkersburg, West Virginia,

for 30 years, the company has approximately 300

employees.

Its current in-house focus is on traditional metal

fabrication processes of moderate age. More than

75 percent of the company's business comes from

the resale of its products through a national

distribution system.

Operating in a 70-year-old facility, the company's

manufacturing process was characterized by overly

complicated work flow, excessively high inventory

levels, and poor energy efficiency.

Industrial Extension Assistance

Quality Assessment. On June 7, 1993, WSI met

the West Virginia Partnership for Industrial Modernization (WVPIM) when the regional

extension engineer, Raymond Neupert, visited the company. During this initial site visit, Mr. Neupert

presented the services offered by WVPIM to WSI's

vice president of manufacturing, the qualityassurance manager.

After the WSI management team evaluated the

services offered by WVPIM, the company

requested WVPIM's assistance in evaluating its

quality assurance program. Mr. Neupert

responded to this request by proposing that WVPIM evaluate the relative strengths and

weaknesses of the company's program, assessing it

against the criteria of the U.S. Department of Commerce's Malcolm Baldrige Award.

The WSI management team agreed to this

proposal, and Mr. Neupert immediately began to

assemble an appropriate WVPIM engineering team

to perform the quality assessment.

The formal report on WSI's quality assessment,

presented to the company on August 10, 1993,

revealed some deficiencies in WSI's quality

assurance program. The report also established a

baseline against which WSI could measure

subsequent improvements in its quality' assurance program.

Production Process Assessment

WVPIM's successful analysis of WSI's Quality Assurance Program encouraged the company to

request further assistance from WVPIM. The

second request from WSI was for WVPLM to assist

the company in the evaluation of its manufacturing capability.

In response to WSI's second request, Mr. Neupert

proposed that WVPIM perform a Production

Process Assessment at WSI's plant. Again, the WSI

management team agreed to Mr. Neupert's

proposal and he immediately began to assemble a

second WVPIM engineering team to perform the

Production Process Assessment for WSI.

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At WSI's request, one of its manufacturing

engineers was allowed to participate in the entire Production Process Assessment procedure. The

purpose of involving a WSI engineer in the

assessment process was to train him in the methodology associated with the performance of a Production Process Assessment.

The WVPIM engineering team worked diligently

with WSI's staff to develop an indepth analysis of

the company's manufacturing capability. The team

used flow process charting, a standard industrial

engineering technique, to track a subassembly

manufactured by the company through its entire manufacturing process—from receipt of raw

material to shipping.

The material flow process analysis, which the

engineering team developed from the process flow

charting technique, identified the WSI

manufacturing activities that added value to sub- assembly versus those that added only cost.

WVPIM's formal report on WSI's production

process assessment contained the following

findings and recommendations.

WVPIM Findings

• WSI operates most of its production

lines with the traditional batch-type

manufacturing process.

• The sub-assembly was produced by a combination of the batch process and a work

cell arrangement.

• Fork-lift trucks are used to transport

work in process (WIP), and a manual system

is used to track WIP on the production floor. Transportation of WIP and associated delays account for the major portion of the cost- adding activities performed in the surveyed

production process.

• For the sub-assembly surveyed, thedistance

the WIP traveled in the plant was

considerable

WVPiiVI Recommendations

• Form employee teams to analyze the cost

drivers (non-value-adding activities) in each

product line produced at its facility.

• Follow the team's recommendations by

implementing the actions necessary to reduce and eliminate cost drivers.

• Become knowledgeable of and apply the

process flow and value-adding methodologies, because they are the primary tools for

reducing WIP and cost drivers—delays,

transports, etc.—in every function of the

operation.

• Increase the number of work cells. Whenever possible, develop standard tooling

and fixtures to facilitate quick change over in

all production set-ups.

• Utilize the single minute exchange of

dies (SMED) method to reduce set-up times.

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Resulting Manufacturing Changes

After evaluating the proposed recommendations

by the WVPIM engineering team, WSI decided to make the following operational changes in its manufacturing process:

• Establish a "flow-thru" manufacturing

process by incorporating just-in-time (JIT) philosophies and focused factory techniques.

• Implement a pull-production system to keep inventories at the lowest possible level

for most of its major products.

• Further implement cellular manufacturing practices by increasing the number of JIT cells.

• Install a real-time computerized job

tracking and scheduling system to improve

tracking of WIP movement into and out of manufacturing work cells.

Outcomes

When WSI's entire "flow-thru" manufacturing

project was completed in 1995, the company had

substantially improved its manufacturing

capability. WSI is now realizing significant

monetary benefits resulting from shortened production lead times, improved labor efficiency,

and reductions in material handling and inventory

costs. Revised work flow, work in process,

scheduling, and inventory levels also have given

WSI 40 percent more available plant floor space than it needs.

WSI is currently building a new facility in Williamstown, West Virginia. The benefits realized by faster cycle times and improved work flow were factored into the floor space design of the company's new facility.

Impacts to the Firm. WSI concluded in its evaluation that WVPIM assistance had an annual

impact of $2,670,000 on its operations.

In WSI's evaluation of the impact of the services provided by WVPIM, the company stated the annual operational improvements by category as shown in Table 1.

Table 1

Operational Improvements

Operational Improvement Financial Benefit

Overall Inventory Reduction $2,000,000

Improvement in Sales $400,000

Overall Productivity Improvement $270,000

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Conclusions

JIT philosophies, focused factory techniques, a

pull inventory system, workcells, and an

appropriate infrastructure were targeted by WSI in improving competitiveness. This initial improvement in competitiveness permitted the company to reduce the size of its new facility and

increase its sales which, in turn, further elevated

the company's competitiveness.

The connection made by WSI with WVPIM, the

local Manufacturing Extension Partnership, was a

vital link to services that the company can use in the future to move toward lasting competitiveness

and world-class manufacturing status.

11-202