AME Manufacturing Excellence winners take many roads to improvement
Seven companies honored at annual conference in Dallas
The seven winners of the 2011 Manufacturing Excellence award all have had different journeys down their road to a Lean manufacturing operation. They are all finding their way down that road to productivity and operational success.
Sponsored by the Association for Manufacturing Excellence, the Manufacturing Excellence award honors companies that demonstrate significant progress in continuous improvement over a three-year period.
The 2011 winners are:
- Acumed LLC; Hillsboro, OR
- Aera Energy LLC, Development; Bakersfield, CA
- Autoliv; Brigham City, UT
- IEC Electronics; Newark, NY
- Medtronic Spinal; Warsaw, IN
- Milliken's Johnston Plant; Johnston, SC
- Raytheon Advanced Product Center; Dallas, TX
Each of the winners discussed their particular improvements during a series of presentations to AME members at the convention in Dallas on Wednesday.
For Jeff Rosenlund, director of business development at Milliken and Co., the award for the company’s Johnston plant was the culmination of a continuous improvement process for the specialty fabrics manufacturer that has raised productivity by 23% while lowering off-quality product by 91% to less than 1% of total output.
“People ask me what comes first – associate engagement or operational excellence. I say they come simultaneously. They feed off each other,” said Rosenlund. “It’s based on a foundation of safety. That is our trust component. Employees own the safety process. Our associates are making the system run and taking care of things. The system has allowed them to work at a high level.”
The company has adopted a zero-loss measurement. They calculated in 1995 that 57% of non-fixed costs (raw materials and variables) were going to waste. The company has cut that to just 31% today – a 46% decrease. Rosenlund noted that while much of past managerial time has been spent putting out fires, the new processes have led to less firefighting and less operational issues, which have freed time for the plant’s continuous improvement efforts.
For Roy Wiley, spinal and biologics site lead at Medtronic’s Warsaw operation, the key to their plant’s improvement has been to include a key member of the management sometimes overlooked in the production process.
“Our key strategy was putting the head of our HR department into policy deployment. On employee engagement, if you’re not partnering with HR, you’re missing an opportunity,” Wiley said.
The medical products manufacturer works in a highly-regulated industry in both the U.S. and globally. That’s why Wiley said they have been able to streamline their troubleshooting process through greater alignment. “The total focus of the senior management team is around communicating well,” he said. “We weren’t finding out about things a week before the product was due; we were finding out months in advance. Horizontal alignment is a big key to our success.”
Acumed Innovations Solutions is another medical products manufacturer honored by AME. The company, which manufactures splints for broken limbs, has similar regulatory issues, but the same commitment to finding their trouble spots.
One was a language barrier. Plant manager Loren Blanchard said the Lean terminologies such as Kaizen were making it harder to get employees engaged. So they changed the terminology to process improvement, or pi, and used the mathematical symbol for pi as the logo for the program. “We had to meet expectations,” Blanchard said. “We didn’t call it what might call it, but we shaped it to what we do.”
The pi group scheduled a series of one-month projects designed to get workers focused on quick returns for their efforts in a defined time frame. As a result, the cost of goods sold has dropped 30% in the last three years. “That puts us in a competitive position,” Blanchard said. “We’re prepared to compete with anybody in the world. I’m not concerned with our cost structure based on what I see coming out of China.”
IEC Electronics hit its lowest point in 2005. Its workforce has been cut from 2,000 to almost 100, employee morale was low and the company needed a massive reinvention. In just six years, IEC, a Newark, N.Y. high-tech manufacturer of built-to-print products in advanced technology, has grown in employees to 850, has a CAGR of 38% a year and was rated the number 3 small company by Forbes magazine.
“We were a 46-year-old company. I don’t call us a start-up. I like to call us a start-over,” said Jeff Schlarbaum of IEC. “We focused on flawless execution and technology platform superior to our peers. We created a culture where employees were inspired to drive fundamental changes in the business.”
That required major changes. “After a decade of contraction, our workforce was disheartened. They were focused more on retaining job rather than move forward,” Schlarbaum said. “As we were trying to save the company from bankruptcy, we had to affect culture shift and attract new customers. It took us a good two years to grind through the process.”
The investments in products and people have paid dividends, but Schlarbaum said there is more to do. We’re proud of what accomplished, but we have a tremendous opportunity to improve,” he said. “We’ve done a great job in terms of our manufacturing environment. Our next step is to engage our finance and supply chain.”
Raytheon’s reputation as a defense contractor makes the quality of its finished product of national importance. “We had several factories making a wide range of products, and they were all operating slightly differently,” said Dan Burke, Raytheon’s operations manager in Texas. “We had pockets of excellence, but we were not doing a good job of sharing. We aligned all the factories with common principles and tools, and a defined value streams.”
“Our goal was to build a superior end to end experience for all of our customers,” he added. “Number one in that is an empowered workforce. We integrated information systems so each member of the team can make fact-based decisions.”
Aera Energy LLC has a different product. As one of California’s largest oil producers, its external image is a company that drills oil wells. Within the company, though, Aera sees itself as in the oil well manufacturing business, using Lean principles to deliver highly efficient operations.
“We apply Lean principles in a non-manufacturing environment,” said Steve Charles of Aera. “Our ‘shop floor’” is quite large. Our Belridge Producing Complex covers an area of 60 square miles. As a result, we move workers past stationary products vs. moving product past stationary employees.”
That product is to complete three wells a day. That comes to 1,000 a year, a high total for the industry. The other driving principle is safety. It’s very important to create a safe work environment,” said Robert Deutman of Aera. “We’ve gone from .8 incidents in 2009 to 0.2 in 2011, and 1.2 is the industry average. Our biggest challenge is to improve processes while operating in an increasingly complex environment.”
Autoliv manufactures inflators for air bags and safety systems in automobiles. The company has more than 46,000 employees worldwide and has been widely recognized for its ability to manufacture high volume (47 million inflators) with high quality (besides the AME award, Autoliv also has received a Shingo Prize).
For the 950 employees in Autoliv’s Brigham City, Utah plant, the company focused on continuous improvement. “We wanted to develop a mentoring program,” said Brian Hyde of Autoliv. Out of that came Autoliv Production System University.”
They continue employee alignment through 15-minute focused workshops, where the front office and line workers meet to directly discuss issues in each area of the operation. “We’re working to get all 950 people aligned,” Hyde said. The moist visible result of that alignment is that the number of inflators produced per employee has shown sustained year-over-year improvement.
Now Autoliv is expanding that alignment to its suppler base. “We’re only as good as our suppliers, and we found many of our suppliers not using Lean tools,” Hyde said. By exposing the suppliers to the Lean tools through training at the Autoliv University, the company has started to bring its suppliers in line with the rest of the company’s operational goals.
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2012 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.