THE CHALLENGE

While MFG has always had a healthy balance sheet, four years ago the company began feeling the impact of higher costs, increased competition, and demanding customers. MFG’s operations are highly energy dependent. Natural gas powers boilers that steam-heat molds, and some very large parts are baked in large ovens. Energy costs were ramping up quickly, reaching a peak when from August, 2005 to February, 2006, natural-gas costs tripled. Also, many of the large composites require labor-intensive processing and handling. While competition from within the United States was heating up, customers wanting lower production costs were looking to move production to lower labor cost countries, namely China, applying additional pressure. MFG was also feeling the weight of environmental regulations to limit emissions, primarily styrene, a component of the polyester resins in the composites.

Even as raw material and energy costs were increasing, customers, especially those in the automotive and trucking industries, were asking the company to make cost reductions and share the savings. Finally, large-truck and automotive customers were requiring their suppliers to maintain ongoing, viable Lean and Six Sigma initiatives as a prerequisite for a continuing customer-supplier relationship. Though dictated in part by these demands, Lean and Six Sigma methodologies and techniques loomed as the perfect framework and structure to attack the other challenges as well as helping prepare MFG for future growth and new process investment.

THE APPROACH

MFG made its move in 2003, hiring Kurt Fink, previously the corporate director of Lean manufacturing at a tier-one automotive supplier, to lead its own Lean/Six Sigma effort. Each of MFG’s 12 manufacturing facilities was evaluated to determine the state of its continuous improvement program, and readiness to accept new thinking. Needs were established for each facility and a core of 17 people from the most ready were selected for training. MAGNET provided the group with green-belt Six Sigma training and assisted in teaching advanced Lean manufacturing methodologies (Toyota Production System). A second group, including one individual from each facility, completed Six Sigma black-belt training shortly thereafter, also provided by MAGNET. With these efforts MFG became self-sufficient in spreading the Lean/Six Sigma program throughout the organization.

MFG began implementation with the 5S process, which is rooted in workplace organization and good housekeeping. “If you don’t start there and have the discipline to sustain that, you won’t have the discipline to sustain any of the tools within the program,” advises Fink. Through Kaizen events and value-stream mapping the company worked to cut cycle times, reduce part travel and handling, speed die changes, minimize scrap, as well as make facilities more “visual” and bright. To reduce defects, the company instituted Fast Response meetings, which are called every day at 2:00PM to inspect randomly selected parts in a brightly lit room, looking for imperfections. If any are found, an ad hoc team is formed on the spot to focus on the issue. Structured problem solving, introduced by MAGNET, is applied to identify root cause and a plan and timetable for resolution is agreed upon before the meeting can end.

CUSTOMER QUOTE

“Without the full support of executive management as well as a long-term vision  of the Lean process, you’ll never be successful. What MAGNET did was help confirm to our executive management team that these techniques work. They brought in outside examples that helped our teammates understand the principles of Lean manufacturing. MAGNET also provided tools that made it easy for executive management to measure progress and understand the program’s benefits.”

Kurt Fink, leader of the original Lean and Six Sigma programs, and now plant manager of Premier Molding Co., Ashtabula, Ohio, one of the MFG companies.

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