Consumers Interstate Corp. uses Lean to meet economic challenges
By Susan Avery -- Purchasing, 7/16/2009 2:00:00 AM
Rather than hunker down in this economic downturn, Consumers Interstate Corp. is meeting challenges posed by the recession head on—by hosting an education and networking event on Lean Procurement for a group of manufacturing executives at its headquarters in Norwich, Conn. recently.
Kenn Fischburg, CEO at the distributor of MRO (maintenance, repair and operations) supplies, greeted the attendees at the start of the peer-to-peer session by recalling his company's decision to embark upon its own Lean journey. "I have two challenges," he said. "The recession and competition. To be successful as a distributor, we have to get product out the door. My sales force has to be efficient."
Indeed, "the road to lean" and "moving lean from plant floor to office" were two topics addressed by executives of local manufacturing companies in their 10-minute presentations. Another topic of particular interest to the purchasing and supply chain professionals on hand at the event was "developing lean suppliers and customers." Immediately following the presentations was a question-and-answer and discussion period. A tour of the facility wrapped up the event.
Manufacturing executives attending the event are either implementing Lean manufacturing or are interested in doing so, Fischburg told Purchasing. The objective of Lean as described in an event handout The Lean Manufacturing Pocket Handbook by Kenneth W. Dailey is to "minimize the waste endemic in this increasingly complicated world of manufacturing and thus improve competitive performance." Jose Garcia, president of GCI Engineering, a continuous improvement firm specializing in Lean Six Sigma in Lakeville, Mass., moderated the discussions.
While companies on the agenda represented different industries, all the manufacturing executives who spoke shared a similar philosophy: that Lean is a journey and it is the process rather than any one individual employee that makes it successful.
ON THE ROAD. "Lean is not a single event," said Eric Olson, who as CEO introduced Lean to Engineered Materials Solutions, a producer of clad metals in Attleboro, Mass. He presented on the topic of why companies should consider Lean. He listed reasons: identify and eliminate unnecessary waste, reduce bottlenecks and improve efficiency and productivity and reduce working capital and increase profitability. Some results the company has realized include: improvement in cycle time from four weeks to 10 days and 95% on-time delivery.
Olson suggested manufacturers apply Lean to the sales through shipping processes at their organizations first and then extend it out to suppliers and customers. Some examples of Lean tools manufacturers use to remove waste or inefficiencies from processes, according to The Lean Manufacturing Pocket Handbook include 5S, a methodology for organizing, cleaning, developing and sustaining a productive work environment. Another is value stream mapping, the process of identifying and charting flows of information, processes and goods across the supply chain. A Kaizen event, another Lean tool that involves employees, evaluates and re-evaluates processes for the elimination of waste.
"Start (the Lean journey) from the top (management) down to the factory floor," Olson said. "What you as leaders want eventually is for teams of employees who are trained to take over and continue to drive the process forward."
Garcia, as moderator, echoed that thought. "For Lean to be successful, you can't delegate," he told the manufacturing executives in the room. "You, as a leader, have to be involved, too."
SUPPLY CHAIN. Addressing the topic of extending Lean to customers and suppliers was John Kilcoyne, CFO at International Packaging Corp., a manufacturer of custom designed presentation products and boxes in Pawtucket, R.I. His company, after applying Lean on the production floor, next extended it to purchasing where using the 5S tool, it put processes and metrics in place to improve efficiency and communication with suppliers.
"Our goal is to be the best information provider to our suppliers so they don't waste time," he said, adding that the company's buyers now meet quarterly with suppliers to review metrics and yearly to discuss the relationship.
Christopher Yard, executive vice president and COO at Mercury Wire Products, a maker of custom wire, cable and engineered assemblies in Spencer, Mass., said that as a result of Lean, his company reorganized into value steams removing any hierarchical structure. The value streams consist of employees responsible for production as well as representatives of purchasing and customer service. A value stream is defined in The Lean Manufacturing Pocket Handbook as all actions required to bring a product or service from raw material to possession of the customer.
"Lean is ultimately about the customer," he said. "The customer defines what value is. Our goal is to deliver that."
On-time delivery of orders to customers has been the focus of Foster Corp., a custom polymer blends manufacturer in Putnam, Conn., from day one said CEO Ken Pickering in his talk. "Our customers want what they want when they want it. They are interested in time and quality. Price is always fifth or sixth on their lists."
By applying Lean to its operations and running Kaizen events, Foster was able to improve its on-time delivery to 98% from 95% over a three-year period. The company also added a "cool idea of the quarter," program or, as Foster explained it, "opportunity for employees to make a difference in the workplace." Every employee is responsible for one idea per month that saves either time or money or enhances the customer experience. About 70% of ideas are implemented without management involvement.
THE OFFICE. Following up on the customer theme, Jim Murphy, president of the extrusion systems business at Davis-Standard in Pawcatuck, R.I., said that his company established a vision of "converting customer ideas into successful products" when it began its Lean journey.
Employees went through initial training and the company developed a communication strategy that includes banners and a newsletter, he said. The company holds Kaizen events and hired a full time director of continuous improvement. Now, Davis-Standard has taken its journey to the office. One result: A reduction in cycle time (to get the order to the factory floor) from four weeks to 10 days. It's also seen improvements in on-time delivery, inventory turns and profitability.
Consumers Interstate has held other educational events for manufacturing executives (customers, prospects and others) in the past. The distributor also has hosted training sessions on Lean procurement and other topics for MRO buyers.
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