MBX Systems: Maintaining quality at a time of expansion
MBX Systems has been able to expand by continuing to demonstrate operational excellence
As a manufacturer of blade servers and rack solutions for data centers, MBX Systems found a need to expand its manufacturing operation from just under 20,000 sq ft to a new 80,000-sq-ft facility in Libertyville, Ill. Carl Nothnagel, director of operations for MBX Systems, talked with Plant Engineering about the myriad challenges of rapid expansion and making sure you have the talent on hand to keep growing.
Plant Engineering: Now that the recession is behind us, what are the lessons you learned about your operations, your workers, and manufacturing?
Carl Nothnagel: You can still grow your customer base during a recession as long as you can demonstrate operational excellence. For example, in assembly manufacturing, off-the-shelf components are readily available to anyone and can be configured in an infinite number of ways. In this case operational excellence is measured by a combination of quality and performance. Quality is critical because customers expect their products to deploy perfectly; you never want to give them a reason to look elsewhere. Performance is rooted in how components are selected and engineered to work together. Well-built and well-engineered products create an uneven playing field when competitors’ operations are fighting to keep up and losing their customer base.
Bench strength is critical. During a recession you tend to hold off on new hires, and if you’re lucky you can afford to retain your manpower. But after a recession new team members need to be situated and acclimated quickly. To do this successfully, first you need the systems, processes, and tools available. Second, and more challenging, is to have strong, flexible, and cross-trained employees to help bring each new team member up to speed to start off on the right foot.
Adding capacity is expensive, which makes scalability invaluable. Velocity to grow becomes ever more critical after a recession. The ability to react and scale goes hand-in-hand with bench depth for each of our teams. Each team has to be prepared for serious growth and various growth scenarios.
PE: Why are you optimistic about your own manufacturing operations?
Nothnagel: We have continually invested in our infrastructure and our teams. We increased our capacity fourfold by relocating to a larger facility. We researched best practices for technology assembly plants, took the best of what we saw, and improved upon it.
Our in-house software developers designed our production software and continue to enhance its functionality to keep our operations highly scalable while remaining nimble. We closely measure quality and performance on a monthly, quarterly, and annual basis and challenge ourselves to continuously improve year over year.
We are optimistic because the hard decisions we’ve made over the past few years have been validated by exceeding our new business growth objective and attracting larger-volume customers. Since moving to our new plant, our orders have increased 39% and our on-time delivery rate has improved on top of a 58% increase in shipments.
PE: Are you as optimistic about American manufacturing as a whole?
Nothnagel: I think for certain markets manufacturing will grow, and we are seeing an uptick in reshoring for technology manufacturing. Overall the growth is coming from industries that require higher quality, faster turnaround, increased customization, and variability in demand. For more commoditized manufacturing where cost is the primary concern, I think there are still more viable options overseas. In general I think we will see some gains in manufacturing this year and next, but overall I remain cautiously optimistic.
PE: What is the best thing you do in your plant today?
Nothnagel: The best thing we do is to stay on the forefront of the technology curve and make technology the backbone of our operations: our engineering team performance-tests components to develop new platforms while maintaining over 300 active platforms; our manufacturing teams operate with advanced Super Cell work centers, increasing employee throughput capability by up to 500%; and our warehouse team uses Bluetooth tablets with a picking app that has increased accuracy to 99.5% and speed by more than 100%.
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Annual Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.