SUCCESS STORIES
Cabinet Door Service
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A.R.E. Manufacturing
AmFor Electronics
The McTavish Company
A.R.E. Manufacturing, Inc.
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A.R.E. Manufacturing, Inc. empowers their employees through Lean
A.R.E. Manufacturing, Inc. specializes in utilizing high end CNC machining equipment to manufacture precision components. Since its foundation in 1980, A.R.E. Manufacturing, Inc. has grown from rom one lathe in a garage to an operation with over 60 employees operating mills, lathes, machining centers, turning centers, automated saws, tube benders and welders. The majority of A.R.E. Manufacturing, Inc.'s business supports the dental, recreation and marine industries.
Situation
In 2004 A.R.E. Manufacturing, Inc. almost tripled in size due to its acquisition of another company's assets. A.R.E. Manufacturing, Inc. did not have sufficient skills or controlled systems in place to effectively manage this growth. Due to these deficiencies, the organization lost much of its ability to manufacture product in any predictable or repeatable fashion. In a short period of time, employee morale decreased, quality dropped and manufacturing lead times increased. All of this resulted in loss of sales and an inability to maintain profitability. A.R.E. Manufacturing, Inc. was losing its competitive edge and had reached a choke point with respect to necessary decision makers and problem solvers.
Solution
A.R.E. Manufacturing, Inc. chose to partner with the Oregon Manufacturing Extension Partnership (OMEP) for training and implementation support.
With OMEP's training and support, A.R.E. Manufacturing, Inc. has accomplished the following:
- All employees have received training and skills building in the application of Lean. Many employees received advanced training in 5S, Value Stream Mapping, Set-up Reduction, Problem Solving and Leadership.
- A.R.E. has transitioned from traditional departmentalized batch and queue processing to a cellular manufacturing approach. This has allowed the organization to build teams that utilize the skills developed in training to self manage their scheduling and implement real time improvements.
- Shop floor best practices for equipment set-up and operation have been developed. These practices have been documented and are used as standard training procedure.
- A.R.E. defined performance indicators and developed tools for monitoring performance. Metrics are used to implement measures to keep systems predictable and repeatable.
- Organizational communication has significantly improved due to open forums, daily toolbox meetings and weekly supervisor meetings. Managers and supervisors have taken on a leadership role and continue to develop through ongoing training and mentoring.
Results
With OMEP's support, A.R.E. Manufacturing, Inc. employees have affected significant improvements in operations. Over the past year and a half, A.R.E. Manufacturing, Inc. has seen significant drops in equipment set-up times. More critical to the organization's long term success is the fact that these improvements have been standardized so that they are repeatable and sustainable. As a result of these gains, the company is in a position to reduce finished goods and work in process inventories. This in turn will reduce the company's costs and lead times and positions them as an industry leader in their market.
Quantifiable Gains
- A.R.E. Manufacturing, Inc. has added 15 new jobs since beginning the Lean process.
- Over 50 employees have received Lean training.
- The average employee wage has increased from $13.62 per hour to $15.54 per hour.
- There has been significant improvement in employee involvement and morale.
- Cost savings due to improved practices and inventory reductions: $300,000
- Sales have increased by $500,000
- On-time delivery has increased from 75% to 96%. Customer reject rates have dropped by 43%.
Testimonial
When the decision was made to transition to a Lean Enterprise, OMEP was chosen because they clearly offered a service superior to their competitors. Before using OMEP's services, we were aware that change was necessary, but never found the time to start the process. OMEP, with their very knowledgeable staff has been a great catalyst to get the process moving and to keep it moving forward. OMEP's consultants have been a pleasure to work with and have shown a genuine interest in the success of the project. As can be seen by the "quantifiable gains" listed above, in just a short period of time the results have been excellent. We're excited about the start of our Lean journey and have learned that it is a continuously changing process. OMEP's continued involvement is vital to our success and the development of manufacturing practices necessary to compete in the global economy. I believe that OMEP's program is critical to the success of manufacturing in the State of Oregon. Domestic manufacturers provide living wage jobs and organizations such as OMEP are essential in keeping manufacturing alive and well in the United States.
— Alvin Elbert, President
