SUCCESS STORIES
Cabinet Door Service
Welch Allyn Monitoring
A.R.E. Manufacturing
AmFor Electronics
The McTavish Company
AmFor Electronics
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Lean Manufacturing at AmFor Electronics
AmFor Electronics' primary business focus is the development, manufacturing and marketing of automotive electrical test equipment, direct connection test leads, repair, adapter and custom wiring harnesses. In the automotive electrical business since 1961, they have always been a family owned company that has prided themselves not only on providing quality products and services to their customers, but also being a great place to work. They have approximately 35 employees.
Situation
In June of 2006, AmFor, a small Portland manufacturing company, contacted Oregon Manufacturing Extension Partnership (OMEP) for some manufacturing help. Their management team had been reading about the Toyota Production System and Lean Manufacturing and decided that they needed to implement some of these concepts in their operation.
When OMEP did the initial assessment it became very apparent that AmFor Electronics needed more than just help on their production floor. With their sales flat and profit margins decreasing, they really needed help with top line growth and they needed it fast — new customers, new markets, and a new marketing message.
Solution
OMEP took the lead and helped AmFor obtain grant funded training and provided marketing strategy and lean enterprise assistance.
OMEP consultant Ken Milosevich contacted Kevin Johnson, Sr. Project/Program Coordinator, at the Portland Development Commission and secured funding for a marketing/sales improvement initiative. With OMEP in the project lead, Peter Arezzini, president of Arezzini Associates, was subcontracted to work with AmFor's management team to develop a marketing strategy for top line growth. At the time that AmFor began their strategic work with Arezzini, they had been doing business as NW Regulator Supply and had several business identities that were diluting their market focus. In a matter of just a few weeks, they cemented their business identity as AmFor Electronics, upgraded their corporate image, moved their entire operations to a new facility that was more conducive to product flow, acquired the assets, along with a couple of large customers, from a smaller competitor, and reorganized the company to be more focused on specific market segments.
In September 2006, with OMEP's help again, AmFor Electronics received a Governor's Workforce Training Grant for employee training and Lean implementation. Ken Milosevich, an OMEP consultant, provided Principles of Lean and 5S training to all company employees. With Ken's guidance, AmFor's Lean team used Value Stream Mapping to develop a Lean Project Plan and then implemented the plan over the next few months.
One specific improvement was the placement of all their crimping machines onto rolling carts instead of having them lined up on fixed bench tops. This gave employees the flexibility to move the machines around and create custom manufacturing cells dependent on their customer orders. They also combined their two electrical test assembly stations into one assembly cell that reduced the square footage required by more than 50%, reduced their lead time to their customer, and continued to produce a high quality product.
Results
- AmFor Electronics has seen their sales increase by 33% in one year.
- January 2008 was the company's biggest sales month in company history and they did it all with fewer production man hours.
- Profits have increased by 15% and their on time delivery to one of their newest and largest customers is 100%.
- And they are not finished — they plan to double their sales volume in 5 years. AmFor is still looking to do things better, quicker, and with less waste. Their goal is to continue to increase profits while passing some of the savings to their customers.
- Another goal of AmFor Electronics has been to keep living wage jobs here in the state of Oregon.
- Prior to starting the project AmFor Electronics had 24 employees and today they have 37.
- They have even brought back some cable assemblies from China, because Lean manufacturing enables them to be more competitive in a global marketplace while manufacturing in Portland.
- AmFor maintains high employee retention by offering full benefits for its employees and all family members and 3% 401K matching regardless of whether the employee contributes.
- For the economic development partners, another plus of AmFor's success is that the grant funded investment in OMEP's consulting service was recovered in new sales growth more than 10 times over in about one year and a thriving business is now firmly in place and growing in the community.
Testimonial
Amfor Electronics was faced with a mature market for our legacy products and difficulties extending our core competencies in electronic manufacturing to other opportunities. Pressure caused by offshore competition was challenging our strong desire to retain manufacturing jobs in Portland, Oregon.
We contacted OMEP in an effort to make our manufacturing processes more competitive. Ken Milosevich and Gerry Snell toured our facility and correctly identified that our biggest problem was with sales growth not manufacturing processes. OMEP recommended working with a sales/marketing consultant (Arezzini Associates) to improve our market and sales growth.
As we were working Peter Arezzini to build our sales growth, OMEP developed a training program funded by a matching grant from the Oregon Governor's Workforce Training Initiative to educate our organization on the principles of a Lean Enterprise.
As a result of working with OMEP, AmFor Electronics has increased sales by 30% in the first year and added 12 jobs to the local economy.
— Jerry Koopman, CEO
