Next Generation Manufacturer Newsletter – May 2013 (admin posted on May 7th, 2013 )

Events for Manufacturers
May 2013

Attend one or all of MassMEP’s events and you will learn and gain real-world knowledge that you can immediately apply in your company. Below is a sampling of some of our upcoming events. For a complete list of course descriptions and registration information on all of MassMEP’s events, visit the MassMEP web site.

MassMEP Programs & Events
For complete details about these programs for manufacturers, visit the MAC Events Calendar.

Partner Events

April 2013: Next Generation Manufacturer Newsletter…

From the Desk of Jack Healy
The Demand of More for Less Falls on Small Manufacturers’ Shoulders. Jack Healy.

Workforce Strategies
Manufacturing Skills Academy Network News. MSAN.

Critical Skills Assessment: Identifying What Needs to be Taught and to Whom. Critical Skills Assessment.

Business Owners’ Corner
You’ve Got a New Product Idea. Scared S**tless? Now What? Part 3. The Inventing Life.

Partner Highlight
Mass Growth Capital. Mass Growth Capital.

——————–

About the Manufacturing Advancement Center
The Next Generation Manufacturer Newsletter covers the business of manufacturing in New England. Running a manufacturing business requires attention to countless details. To compete in this new, global economy, you must pay attention to the entire business process — from front office marketing and accounting, to back end inventory management. The Manufacturing Advancement Center is here to guide you in your quest for continuous improvement throughout the enterprise. For more information, see http://www.massmac.org

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CATEGORIES: Lean Manufacturing, Massachusetts Manufacturing, Next Generation Manufacturing

From the Desk of Jack Healy (admin posted on January 24th, 2013 )

Facing the New Challenge of Growth Through Innovation

Jack Healy, MassMEP Director of Operations

Jack Healy, MassMEP Director of Operations

By Jack Healy, Director of Operations, MassMEP jackh@massmep.org

“Finding ways to help smaller firms to innovate could help many of them remain competitive and expand their operations.” – 2012 Staying Power II Report Card on Manufacturing

Over the past decade, the continued job losses in US manufacturing have been attributed to a variety of causes — productivity increases, production offshoring by large manufacturers, even a general lack of US manufacturing growth. The good news is that we have seen a leveling off of job losses over the past two years and this is now reflected in our state’s manufacturing Gross State Product (GSP).

Manufacturing Gross State Product Increases
Massachusetts’ manufacturing GSP for 2000 to 2007 was mired in a slow growth mode, increasing by only 1.3%.  From 2010 to 2011, Massachusetts manufacturing Gross State Product increased by 20.9%! What happened?

This turn-around was engineered by manufacturers remaining committed to continuous improvement activities to boost productivity, innovation, and, subsequently, competitiveness in their respective sectors.  The “2012 Staying Power II report card on manufacturing“1 found that the initiatives pursued over the past five years to grow manufacturing operations in Massachusetts produced results.

  • Nearly five out of six firms (83%) invested in new manufacturing equipment.
  • While investments are certainly part of the story, half of all firms (50%)invested in education and training of their employees in order to keep their skills current with new technology.
  • Just about half of all firms (47%) expanded their sales and support efforts.
  • Almost the same proportion invested in product research and development, including more than one third (34%) of the over 5,000 small manufacturing enterprises (under 20 employees) and nearly three quarters (72.9%) of larger firms (over 101 employees).

The Staying Power II study validated these findings when they surveyed manufacturers on the use of borrowed funds. They found that 16.8% of the small manufacturing enterprises (20-100 employees) and 30.4% of the larger manufacturers (over 101 employees) used their borrowed funds to support their research and development initiatives. This finding came as a surprise in that most small manufacturers have traditionally managed with fiscal agility, i.e., by making small bets. While few manufacturers suffer any shortage of ideas, their fear of risk has always minimized their ability to turn concepts into cash. It is reassuring to see that a significant number of small manufacturers have learned the lesson of 2009 — that there is not enough business to go around and in order to get it you have to work at it.

Because innovation is “so critical to the survival and prosperity of Massachusetts manufacturing,” the Staying Power survey probed extensively about the type of innovations manufacturers were utilizing. The results of this are contained in the following “Innovative Activity and Innovation Score.”

For anyone who wishes to assess their own firm’s innovation performance, grade your company according to the above and then benchmark against the survey participants, as follows:

Survey Innovation Score

Innovation Level

0-10

Very low

11-20

Low

21-35

Average

36-50

High

51 +

Very High

Innovation Index and Increased Production
One of the major survey findings was that only 29% of the firms who scored “very low” on the Innovation Index expected to increase their production levels over the next five years.  This is in sharp contrast to the 88% of the firms who scored “High” or “Very High” on the Innovation Index; they expect to increase production over the next five years.

Of all the firms in this manufacturing survey, the firms with fewer than 20 employees, who represent over 72% of all manufacturers  in the state, had only 6% of their firms with “Very High” Innovation scores.  Over one third (35%) of these firms were in the “Very Low” category, with more than half (56%) scoring either “Very Low” or “Low” on the Index.

Significantly, the survey indicates that “finding ways to help smaller firms to innovate could help many of them remain competitive and expand their operations.”

Continuous Improvement Enables Innovation
Over the past decade, the small manufacturing community has focused on implementing continuous improvement techniques such as Lean, Six Sigma, etc. This acceptance and application of the continuous improvement programs was an enabler for manufacturers of all sizes to deal with the changes and market demands of the last decade. However, market demands change and today we find many of today’s large manufacturers are asking their suppliers to move up the technology ladder.  This change, in turn, offers the small manufacturing community the opportunity to compete on innovation rather than on price, as well as provides a significant opportunity to grow their respective companies.

Manufacturers looking to access new technologies in order to grow their companies can find assistance from the MassMEP. Contact Greg King at 508-831-7020.

1. Prepared by Northeastern University, Kitty & Michael Dukakis Center for Urban and Regional Policy.

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From the Desk of Jack Healy (admin posted on January 9th, 2013 )

A Story of Knowing Customer Requirements & Exceeding Expectations

Jack Healy, MassMEP Director of Operations

Jack Healy, MassMEP Director of Operations

Conventional wisdom at the time was that only a small segment of dissatisfied customers ever complained as few believed there would be any reaction to the complaint.  Nevertheless, smart companies took the approach that those who did complain provided a chance to rectify problems and turn opinions around before they could affect other consumers.  As a result, consumer service departments were focused on answering and rectifying consumer complaints.

Since LEGO was spending millions of dollars in TV advertising to build its consumer base, there was a real sensitivity in this startup to the high cost of customer acquisition and the need to retain every consumer. A complete Consumer Services department was established, even with minimal sales in the first year. We found that consumers of LEGO, both young and old, had a passion to share their experience with the product. We started to receive hundreds of letters endorsing product along with their ideas for improvements and future products.

Many of these endorsements were used as part of our sales presentations. They made it easier to increase distribution channels as few purchasing agents could say “no” to a product that had such strong customer support.  The consumers helped to sell the product. The letters received soon ran into the thousands and were closely monitored. They played an important and continuing role in shaping future product offerings.

These testimonials were important input that the LEGO Group companies continue to promote by asking for customer feedback through their web sites, loyalty VIP clubs, and a myriad of sales collateral materials.

All of this does seem to be in direct contrast to the general manufacturing sector where customer input is rarely sought unless you are an ISO registered company (which requires that you do so).  The recent study of the Massachusetts manufacturing industry, Staying Power II: A Report Card on Manufacturing, completed by Professor Barry Bluestone of the Dukakis Center for Urban and Regional Policy at Northeastern University, summed up the industry’s perception relative to customer demands in the following table.

MASSMAC Image

MASSMAC Image

This summary lists the changes expected to occur over the next five years by the surveyed manufacturers. Across all firms, nearly 46% responded that to a “Large Extent” or “Great Extent” their customers would be coming back to them asking for lower prices. The manufacturers also believe that customers will not only demand lower prices but improved service delivery and better product quality. Only one in eight did not expect greater pressure on service and quality, while 40% of the firms felt that there would be a substantially increased demand for better service, and 36% suggested a very strong demand for quality.

About a quarter of all firms (27%) expect grater pressure to increase the use of new technology and 24 % expect that this would lead to increases in productivity.

The study also found that to a “Large Extent” or “Great Extent,” 51.3% of the companies over 100 employees, expect substantial increases in new technologies. These medium to large size companies are representative of the Original Equipment Manufacturer (OEM) population. This information gives supply chain manufacturers an early indication that they will be required to understand how their OEM’s will innovate and evolve over the forthcoming years. Support must be provided movement into new technologies. Changes in technology will take much longer to react to, plan for, and support than the previous requirements of price, quality, and delivery. Manufacturers will need to develop and implement plans that coordinate external customer feedback and required improvements to their own technology. The one thing that is certain that over the next five years is that businesses will continue to evolve and change, and delighting the customer will be essential for any enterprise in a slow growth economy.

What does it take to delight a customer? Let’s return to the LEGO example. It has evolved into responding to thousands of phone calls, e-mails, letters – all in ONE DAY.  Watch the video demonstration of how LEGO delights its customers, exceeds expectations, and builds a sustainable company.

VIDEO: Why LEGO is the BEST Company in the World

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Growth Manufacturers Case Study (admin posted on December 12th, 2012 )

Growth Manufacturers Case Study

Product Diversity, Quality, Manufacturing Flexibility Lead to Growth in Down Economy

By Karen Myhaver, MassMEP

Curtis Industries is the leading designer, manufacturer, and supplier of weather-tight cab enclosures for commercial, specialty, and recreational vehicles from John Deere, Polaris, Yamaha, Kubota, Cub Cadet, and Kawasaki. They also manufacture snow and ice equipment like plows, blades, and spreaders. Curtis employs 140 employees in Worcester, Massachusetts.

Challenges of Rapid Growth

“While we did experience the macroeconomic declines in 2009, we were able to flex the organization as needed to remain fiscally solvent.  This was in a large part because we implemented continuous improvement activities and supply chain strategies that paid dividends even in the decline. We also had a constant pipeline of new products, and the addition of a few new customers that helped offset other drops in demand.”
— Gabor Hajos, VP of Operations, Curtis Industries

By 2006, Curtis Industries had built a reputation for high quality products within their industry and OEMs orders were increasing. With a heavy focus on meeting production schedules, maintaining quality, and satisfying customer demand, little attention was paid to their manufacturing facilities. As a result, the operation became disorganized. As is typical during periods of rapid growth, Curtis Industries had fallen victim to the practice of locating machinery and items “wherever they fit” on the shop floor. Eventually this resulted in operational inefficiencies and quality issues, leading to customer and employee frustration. The situation also cost Curtis Industries money. They recognized the need to implement top-to-bottom quality and continuous improvement programs to manage their growth effectively.

CI & Workforce Development
The Massachusetts Manufacturing Extension Partnership(MassMEP) worked with Curtis in the areas of quality, systemic continuous improvement, and workforce development. These activities helped Curtis meet the demands of a product evolution, allowing them to efficiently and successfully increase and diversify their customer base.

The initial evaluation showed that the flow was terrible across all three of Curtis’ buildings. Issues were addressed – from front office and engineering to shop floor and shipping – by cross functional employee teams who studied each area and developed plans for new layouts. Six months of planning and another six months of moving went smoothly because the employees were involved in the projects and understood why changes were needed.

 

Efficiency and quality were further improved through process, and 5s Kaizen activities. Another critical strategy the company tackled during this period was evaluating their supply chain and individual vendors to determine where to reallocate or consolidate or make changes.

Independently, Curtis Industries worked to create a quality organization by establishing an internal team of key employees to focus on quality and continuous improvement. In 2011, the company decided to take their system to the next level by participating in theMassMEP ISO9001:2008 Collaborative program. They successfully passed the ISO audit and became certified early in 2012. The certification opened new doors for international business and allowed expanded opportunities with current clients.

 

Gabor Hajos, Vice President of Operations, mentioned that all of Curtis Industries’ employees were encouraged to attend round tables and other training events to gain exposure to new ideas and methods and observe other successful companies. Keeping employees involved and engaged helped with retention and demonstrated that they are valued and that their ideas matter. Workshops in Team Involvement Problem Solving (TIPS), shop math, and English as a Second Language (ESL) were offered to enhance other training experiences.

“Today you have to empower your employees so that they make a difference, so that they’re actually looking at what we call continuous improvement, which is one of our core values at Curtis,” says Scott Nelson, the company’s new President and CEO. “But that means having visual metrics so that the worker always knows through communication what’s important and that what they’re doing makes a difference.” 1

 

Layout changes and Kaizen activities took care of most of the older quality issues. “Now Curtis is doing a wave of higher level work focused on sustaining their improvements,” says Hajos. “Safety is an integral part. Items are addressed as the company is able to prioritize them and devote time and resources, but there is always something being worked on.”

Good process and procedural controls gave Curtis the ability to understand their business better and literally see what is going on. More effective production planning and enhancements and a new layout with improved flow allowed Curtis Industries to react to the flexing market. Enhanced efficiency meant the company was able to meet higher demand with the same number of employees. They could “right size” the organization as customer needs and volumes changed.

“The information helps us analyze situations and allows us to manage capacity and people more effectively,” says Hajos. Continuous improvement and quality activities created additional opportunity for growth.

“Suddenly customers were asking for more cab styles to go with each new type of vehicle,” explains Hajos. “It evolved from us producing one type of cab for a few client vehicles to producing a few styles of cabs for 30 types of vehicles for several different clients. We were agile enough to be able to meet the demand and produce new and innovative designs to satisfy our customers’ needs.”

CI Program Results

  • ISO 9001:2008 certification received, producing new opportunities nationally and internationally such as the retention of $1.5 million annually from a current customer and addition of new customer with sales at $200k so far this year.
  • Development of quality management system and team
  • Addition of one employee and retention of eight
  • Added flexibility that supports quicker reaction to clients’ changing demands
  • Development of systems that expand or contract with the market
  • Ability to design and manufacture in smaller lots efficiently, which allows:
    -   Introduction of new products for new clients
    -   More diversification
    -   Profit gains rather than loses
    -   Investment in employee training, development and growth
    -   More effective management of capacity and personnel

Rick Saia, “Walking the Plant Floor Again,” Worcester Business Journal, October 15, 2012

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CATEGORIES: Lean Manufacturing, Massachusetts Manufacturing

Employee Training Success Stories: Adhesive Applications Boosts Business, Jobs (admin posted on December 11th, 2012 )

Easthampton Company Sticks to Strategy of Improving Skills of Workers

By Karen Myhaver, MassMEP
First in a series of stories about how Massachusetts companies are using the WorkforceTraining Fund to boost productivity and become globally competitive. The Workforce Training Fund Program was established in 1998 to help employers train current employees and new hires.

First in a series of stories about how Massachusetts companies are using the Workforce Training Fund to boost productivity and become globally competitive. The Workforce Training Fund Program was established in 1998 to help employers train current employees and new hires.

Adhesive Applications of Easthampton is a manufacturer of pressure-sensitive adhesive tapes and films. In March of 2007, the company was investigating ways to improve its performance as a company, position itself to be more competitive domestically, and keep foreign competition at bay.

Adhesive Applications discovered that it could apply for Workforce Training Grants available from the commonwealth.  Bill Baldino of Associated Industries of Massachusetts and Jim Gusha of the Massachusetts Manufacturing Extension Partnerhsip guided the company through the grant application, planning, administration and reporting process.

“Working with AIM and Mass MEP made the process uniquely simple,” said Wayne Tangle, Adhesive Applications President. “They were instrumental in ‘walking us through’ the grant process, explaining the purpose of each inquiry within the application and helping us coordinate the required information to best present our goals in utilizing the grant monies.”

The two organizations subsequently helped Adhesive Applications with programs and training modules that allowed the company to make improvements for its employees and to the manufacturing process.

“Over the course of the training period, our associates received constructive, professional information that they have utilized to become better managers and supervisors. The results have allowed us to be a healthier company that communicates effectively, up and down the organization.  This has enhanced our ability to meet growing business demands over the last couple of years,” Tangle said.

“All training and interaction took place within the Adhesive Applications facility for associates integral in meeting the goals of being more competitive and growing our business. The results have yielded a noticeable increase in business whereby we have invested in additional production equipment and personnel and expanded our operation to meet the increase in demand.”

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CATEGORIES: Lean Manufacturing, Massachusetts Manufacturing, Next Generation Manufacturing

A Story of Knowing Customer Requirements & Exceeding Expectations (admin posted on November 28th, 2012 )

Jack Healy, MassMEP Director of Operations

Jack Healy, MassMEP Director of Operations

From the Desk of Jack Healy

A Story of Knowing Customer Requirements & Exceeding Expectations

By Jack Healy, Director of Operations, MassMEP jackh@massmep.org

Some years ago I had the opportunity to join a micro startup for an international company. The goal was to reestablish a brand that had failed using a new corporation that had the U.S. license for the product for the prior 10 years.  This new company, LEGO Systems Inc., was a typical consumer-driven enterprise with a focus on establishing brand acceptance for LEGO Brand building bricks.  With such an outward focus, it was natural that the supporting functions of this start-from-scratch company were established as needed vs. a preplanned part of the system.  One such function that was immediately put together was Consumer Services.

Conventional wisdom at the time was that only a small segment of dissatisfied customers ever complained as few believed there would be any reaction to the complaint.  Nevertheless, smart companies took the approach that those who did complain provided a chance to rectify problems and turn opinions around before they could affect other consumers.  As a result, consumer service departments were focused on answering and rectifying consumer complaints.

Since LEGO was spending millions of dollars in TV advertising to build its consumer base, there was a real sensitivity in this startup to the high cost of customer acquisition and the need to retain every consumer. A complete Consumer Services department was established, even with minimal sales in the first year. We found that consumers of LEGO, both young and old, had a passion to share their experience with the product. We started to receive hundreds of letters endorsing product along with their ideas for improvements and future products.

Many of these endorsements were used as part of our sales presentations. They made it easier to increase distribution channels as few purchasing agents could say “no” to a product that had such strong customer support.  The consumers helped to sell the product. The letters received soon ran into the thousands and were closely monitored. They played an important and continuing role in shaping future product offerings.

These testimonials were important input that the LEGO Group companies continue to promote by asking for customer feedback through their web sites, loyalty VIP clubs, and a myriad of sales collateral materials.

All of this does seem to be in direct contrast to the general manufacturing sector where customer input is rarely sought unless you are an ISO registered company (which requires that you do so).  The recent study of the Massachusetts manufacturing industry, Staying Power II: A Report Card on Manufacturing, completed by Professor Barry Bluestone of the Dukakis Center for Urban and Regional Policy at Northeastern University, summed up the industry’s perception relative to customer demands in the following table.

MassMAC Image

This summary lists the changes expected to occur over the next five years by the surveyed manufacturers. Across all firms, nearly 46% responded that to a “Large Extent” or “Great Extent” their customers would be coming back to them asking for lower prices. The manufacturers also believe that customers will not only demand lower prices but improved service delivery and better product quality. Only one in eight did not expect greater pressure on service and quality, while 40% of the firms felt that there would be a substantially increased demand for better service, and 36% suggested a very strong demand for quality.

About a quarter of all firms (27%) expect grater pressure to increase the use of new technology and 24 % expect that this would lead to increases in productivity.

The study also found that to a “Large Extent” or “Great Extent,” 51.3% of the companies over 100 employees, expect substantial increases in new technologies. These medium to large size companies are representative of the Original Equipment Manufacturer (OEM) population. This information gives supply chain manufacturers an early indication that they will be required to understand how their OEM’s will innovate and evolve over the forthcoming years. Support must be provided movement into new technologies. Changes in technology will take much longer to react to, plan for, and support than the previous requirements of price, quality, and delivery. Manufacturers will need to develop and implement plans that coordinate external customer feedback and required improvements to their own technology. The one thing that is certain that over the next five years is that businesses will continue to evolve and change, and delighting the customer will be essential for any enterprise in a slow growth economy.

What does it take to delight a customer? Let’s return to the LEGO example. It has evolved into responding to thousands of phone calls, e-mails, letters – all in ONE DAY.  Watch the video demonstration of how LEGO delights its customers, exceeds expectations, and builds a sustainable company.

VIDEO: Why LEGO is the BEST Company in the World

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CATEGORIES: Lean Manufacturing, Massachusetts Manufacturing, Next Generation Manufacturing

Video Blog | The Future of Manufacturing in Massachusetts (admin posted on November 21st, 2012 )

Barry Bluestone, Professor Professor of Political Economy at Northeastern University, spoke to the AIM Public Affairs Council and Board of Economic Advisors Friday about his new study:Staying Power II: A Report Card on Manufacturing in Massachusetts. 

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Taking the Next Step to Develop Manufacturing Skills (admin posted on November 14th, 2012 )

Jack Healy, MassMEP Director of Operations

Jack Healy, MassMEP Director of Operations

By Jack Healy, Director of Operations, MassMEP jackh@massmep.org

Twenty five years ago, I had the opportunity to visit two Japanese automotive transplants located in Anna, Ohio and Lexington, Kentucky to study their very productive manufacturing methodologies. Both organizations have continued to evolve and they have been recognized for achieving productivity levels of at least 95% of those located in Japan. This has led to the conclusion that whatever the faults of the US educational system, on- the- job training can compensate for educational deficits.

What was not widely recognized was that both organizations, at that time, made a two-year college degree a prerequisite for employment throughout their plants. Possessing such an extensive skill base obviously made for a much easier development of their productive manufacturing cultures in each of their respective organizations.

As President of a Massachusetts manufacturing firm at that time, I viewed having such a prerequisite degree for my own firm of 250 employees something of a dream. Lacking an existing credentialed talent base or a supportive community college system, the manufacturing community, along with my own firm, were reduced to hiring “the willing,” regardless of educational levels.

MassMEP Image

While we’ve made progress, the Massachusetts manufacturing community still has a ways to go. According to the recent findings in the Staying Power II Report Card on Manufacturing in Massachusetts 2012 report, compiled by the Center for Urban and Regional Policy School, approximately 40% of our entire workforce has a high school or less education level.

As stated in the survey, “In 2005, 33 percent of the workforce had at least a BA; five years later, that number is 39 percent. Younger workers joining the industry are coming in with more education, taking the place of older retiring workers who were much less likely to have gone beyond high school.”

This finding and the fact that high-technology enterprises, such as medical devices and navigational and electronic instruments, are growing sectors and require higher levels of education for their new hires have contributed to the increase in education. In addition, hiring for much of the basic unskilled manufacturing assembly jobs, once the core of manufacturing, has become relatively unimportant. Nearly one-sixth of team assemblers work for employment agencies, which furnish workers to other companies on an as needed basis*, and as such are not included in the state’s manufacturing sector’s employment numbers.

Massachusetts’ ability to provide a large number of well-paying jobs for those with less than a 4-year college education is in decline but may accelerate with the growth of the state’s Advanced Manufacturing sector. The current skills gap of hundreds of manufacturing positions going unfilled, coupled with continued demands for improved productivity, have brought approximately a quarter of the state’s manufacturers to a level of awareness that they must now become personally involved with resolving this problem that is jeopardizing the growth of our industries.

The Staying Power II Survey asked the firms in the survey for their recommendations for “what they thought were the most important initiatives that might be undertaken by industry itself, by their own firms, and by the state.”

The following recommendations were made (and percentage of respondents who thought that these recommendations were very important or extremely important).

  1. Working with school or community college instructors to incorporate industry standards into curriculum — 30.3 %
  2. Creating a certificate in manufacturing technology  — 27.5%
  3. Serving a mentors/advisors at selected vocational schools or community colleges — 27.4%
  4. Speaking to parent organizations/student groups about careers in manufacturing — 24.7%
  5. Contributing machinery, tools, or other materials to schools — 21.0%
  6. Exhibiting at education, career, and technology fairs — 19.7%
  7. Instituting company sponsored educational scholarships  — 14.2%
  8. Hiring vocational/community college teachers to train your employees — 11.6%

The survey also found that at least a third of the respondents are not willing to become involved in any of the recommended programs that may address this problem, either because they believed that they were not useful or because they did not have the resources or time to participate. While this is a significant segment of the manufacturing community, we have seen that there is a general willingness of manufacturers within the state to collaboratively participate in addressing their industry’s skills gap. Thus was born the Manufacturing Advancement Center’s Workforce Innovation Collaborative (MACWIC).

MACWIC is an industry-led collaborative that in less than a year’s time has established an acceptable skills credentialing system and established an articulation agreement with Quinsigamond Community College. Quinsigamond is recognizing and supporting the applicability of the MACWIC skills standard as part of the school’s degreed program in Applied Manufacturing Technology. Many economists attribute the differences in productivity of countries to their labor and capital markets, which makes collaborations like the MACWIC essential to support the necessary development of productivity in our labor markets.

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CATEGORIES: Massachusetts Manufacturing, Next Generation Manufacturing

ISO or not to ISO? That is the question. (admin posted on November 8th, 2012 )

Mike Prior

Mike Prior, MassMEP Director of Business Development

ISO has been a subject of many discussions over the years with manufacturing and service companies alike – what is ISO, what benefits can ISO bring to my company, what will it take to manage ISO if we do move forward, and more specifically, how much is this going to cost me?  First of all, for this discussion, the ISO that I am referring to is the International Organization of Standards for quality which was linked to a quality problem during the second world war when the British munitions factories were trying to manufacture bombs for the European war effort.  At the time, there was one small problem where bombs were exploding in the factory before they ever saw the plane.   For obvious reasons, this needed to be addressed and it was decided that a more standard and consistent practice for making bombs was needed.  The solution – document the manufacturing processes and procedures and prove that they were being followed.  The result was that everyone was aware of how the process was to be done, there was consistency of product coming out of the factory and a very serious problem had been addressed.  This all took place back in 1946 and spawned the British Management Standard – BS 5750.

This process of standardization continued to develop in various parts of the world and in 1987 the British government persuaded the International Organization for Standardization (created in 1947) to adopt BS 5750 as what we now know as the ISO 9000 standard.  Companies were motivated to become ISO certified because they saw the need, similar to the munitions factories, to standardize as well as document what they were doing to produce consistent products.  Since its inception in 1987, the basic standard (ISO 9001) has been revised three times and has morphed from a document control based process to a system that is now focused on the control and improvement of the process itself.  In addition, there have been many more ISO related standards developed and available for any company who wishes to be compliant in their respective industries – medical device (13485), aerospace (AS9100), energy (50001) and companies who need to be compliant to the requirements of Sarbanes Oxley (27001), which we can thank our friends at Enron for.   To date there are 27 different standards out there and I will bet that there will be more to come.  With all of this, I go back to the original question – ISO or not to ISO?

As mentioned previously, ISO is an international standard that thousands of companies comply with in this global economy.  By virtue of the (ISO) standards origin (Switzerland) and its international presence, many companies are finding that they cannot penetrate certain markets without ISO registration.  China and Europe are two of the fastest growing ISO registered regions in the world and companies producing in these regions are requiring ISO as a prerequisite to doing business.  It is now apparent that most of the large Original Equipment Manufacturers (OEM) and defense contractors are also requiring ISO of their preferred supplier base.  “Not ISO?”  “Don’t talk to us”.  In addition to the aforementioned market penetration benefit, ISO can provide other benefits to the manufacturer –

  1.  A competitive advantage over your competition
  2. Bottom line improvement through waste reduction and the streamlining of business processes
  3. It attracts investment, enhances brand recognition and reduces barriers to trade, and,
  4. If a company is in fact primed for growth, it improves business/process performance, manages risk and increases customer satisfaction, which are all key to establishing an infrastructure that will support growth for the long term.

Over 1.1 million companies in 175 countries are currently ISO registered and growing at a rate of about 15% annually.  An Irwin Professional Publishing survey recently showed the following results:

  1.  30% of registered companies experience increased customer demand for products or services
  2. 50% of companies have a decrease of customer audits
  3. 69% of registered companies experience a competitive advantage in the marketplace
  4. 83% of registered companies’ products have higher perceived quality in the marketplace

ISO is all about listening to your customers, understanding their requirements and ensuring that products and services meet those requirements on a consistent basis.  Becoming an ISO registered company is not the panacea, cure or magic potion that we all search for so that we can meet these ever increasing customer demands.  It still comes with a cost, a lot of hard work but most of all, a commitment on the part of top management to not just make this happen and forget about it but to invest in this long term strategy that will provide dividends to the long term success of the company.

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Growth Manufacturers Case Study (admin posted on November 8th, 2012 )

Stoughton Steel Enters New Markets and Raises Funds Through Crowdsourcing

“We have equipment and capacity and even though our competencies are in another market we knew we needed to look for new ideas for steel!” —Eric Lagsdin, VP of Operations

Andris and Eric Lagsdin of Stoughton Steel are sitting at a conference table in their facility in Hanover, Massachusetts. Not long ago the day-to-day pressures that are practically synonymous with running your own business, often kept them working seven days a week and prevented them from taking time to plan, to create, and just to step back and breathe.

Stoughton Steel’s Eric and Andris Lagsdin

Their parents, Andry and Dolores Lagsdin, started Stoughton Steel in 1974 to manufacture stabilizer Flip Pads®, a product invented and patented by Andry for use on the stabilizer feet of backhoes. The company moved to Hanover when they outgrew their Stoughton facility. Eric became Vice President of Operations and Andris, Vice President of Sales and Marketing. Their Flip Pad® product was in demand and they were busy designing and producing new variations to meet customer needs.

Lean & ISO Certification
Five years ago, an important client suggested Stoughton Steel obtain their ISO certification and do some Lean Manufacturing training. Soon the company began working with project manager Rick Bowie of the Massachusetts Manufacturing Extension Partnership (MassMEP) who brought in a resource to assist Stoughton Steel with their ISO preparation. Rick also facilitated employee training in Basic Lean tools, Value Stream Mapping, and Kaizen improvement to help manage their rapid growth. Stoughton Steel racked up the achievements: the ISO certification necessary to develop future business and continue work with current customers, a 10-15% productivity improvement for manufacturing, improved safety, improved morale, decreased down time, and 100% on-time delivery to Caterpillar, a major client.

In 2009, the business, which deals primarily with construction equipment, took a big hit from the economy. Sales decreased by one third. They tried to develop new products or search for new opportunities but couldn’t juggle this with regular production schedules and customer issues. Ideas were shelved for “someday when they had time.”

The team attended CONEXPO, the largest international convention for the construction and construction materials industries, which open their eyes and got their creative juices flowing. Upon their return, senior management met in their conference to talk about transforming their company for growth with the new product ideas they gathered at CONEXPO. Eric warned that before they could successfully take on new ideas and products they their manufacturing process running smoothly again.

Kanban & 5S
“Sustaining improvements has always been tough,” admits Eric, “but the inspiration we got at the show in Las Vegas was the incentive we needed to develop procedures to make the improvements stick!” He suggested they bringing Rick Bowie back to help rejuvenate their processes and develop procedures that would assist them in organizing their work space, making it more efficient and easier to sustain thus allowing them to innovate and explore new product opportunities. This became the foundation for the continuous improvement work that brought about an infusion of new life, new products, and a welcome change of pace for the Lagsdin’s.

 

Visual Kanban

“We did several 5S events to clean and organize before we began,” explains Eric. Rick worked with employees to create visual systems and a game plan to help sustain their efforts. Visuals were imperative since not all thirty employees speak the same language. Color coding tools and areas of the shop according to team allows the shop floor to show when something is out of place or a team is not maintaining the standard. We have weekly group meetings to discuss what is going on and get employee ideas,” adds Eric.

Visual Kanbans virtually eliminated the need for scheduling. Team leaders in each manufacturing area were empowered to handle their own material re-ordering. Standard quality training was also essential and has made ISO audits much easier.

“Hearing why we need to make the changes from an outside source, other than one of us, seems to have a lot more impact,” added Eric. “Rick was able to talk to the employees without dictating and helped change the cultural mindset. He introduced the Pull Kanban process which the team adopted quickly.” Everyone is also accountable for their own work and its quality, freeing up the supervisor to oversee production and makes his job easier and more enjoyable.

“The (Pull Kanban) project helps us sustain ISO with a formal manufacturing process as well as a system to support it,” explains Eric. “Visual Kanban tags show when replenishment is needed and assists with better material control which reduces costs associated with excess inventory and other waste. Our employees really embraced the changes that have made their jobs easier!”

Results and New Opportunities

  • Decreased FlipPad® shipping time from 7 to 2.5 days.
  • Developed new product/market rubber edges for plow blades from same reinforced rubber as FlipPads® and stronger than standard edges.
  • Redesigned rubber cut for plow edges to be re-cut for FlipPads® as needed.
  • Brought work back in-house, purchased hydraulic presses to cut rubber in house. Cost savings paid for presses almost immediately.
  • Used powder coating equipment to take on small jobs during slow periods. Now coat 400-1000 units per week for one client.

“Primarily, we get ideas from talking to people,” says Eric. “I walked around home improvement stores asking people who were looking at mailboxes what they would like to have for options then incorporated the ideas into my designs. Now we have a steel plate customizable mail box that can withstand an explosion!”

What is “Green” and Bakes Pizza? An Innovative Product from Stoughton Steel
Andris Lagsdin spent many years in culinary arts, working under renowned chef Todd English, before returning to focus on marketing, advertising and customer service for the family business. Until recently, his time was consumed addressing customer issues. Now they go months without any.  Quality improvements mean happy customers and that means that Andris can devote critical time to investigating new markets, attracting new business, marketing their new products, and getting them ready for sale.

With his culinary background and vast knowledge of steel, Andris recognized the advantages of the consistent heat produced by using steel plates for some types of cooking. In Modernist Cuisine he read that by utilizing steel plates in a conventional oven you can recreate pizza oven baking at a fraction of the cost.  Baking Steel® was his “ah-ha moment” and Stoughton Steel’s foray into the household consumer market.

“Baking Steel® is also perfect for the little restaurant that can’t afford a regular pizza oven,” adds Andris. “We love the idea of using steel because it is one of the most recycled products on earth and are also having the one- of- a- kind covers for our Baking Steel ®made from recycled billboards!”

But…Will it Sell?
In August 2012, the Baking Steel® project previewed on Kickstarter®, an Internet funding platform, allowing  the general public to learn about and make small investments in a new product  to help fund ramp-up for manufacture. Within a month they had exceeded their funding goal by over 1000% and had received some media attention. A food blogger from New York tested Baking Steel® and reported “some of the finest crust ever made in his oven!”

Initial shipments of Baking Steel® are now being sent to eager Kickstarter® investors. Andris has completely redesigned the company websitehttp://www.stoughtonsteel.com with a new look and feel to help promote their new products and hopes to attract a lot of direct on-line business.

Andry Lagsdin commented, “Working with the MassMEP helped Stoughton Steel stabilize cash flow which enabled my sons to grow the business, organize their efforts, and have some much needed free time to create!”

“Rick showed us the way to make our improvements stick and helped get the workforce, especially our management team, excited about the continuous improvement process.  Everyone has seen the benefits. Now we can listen to new ideas and opportunities because we have freed up capacity by being so much more efficient and because we have made our crew responsible and accountable for quality. Ideas create ideas. Once you bring one to life you learn so much from the process you will be better prepared for the next one and it will take a smaller investment of your time and efforts to get it going.” — Eric Lagsdin, VP of Operations

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CATEGORIES: Lean Manufacturing, Next Generation Manufacturing

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