KIALOA manufactures a full line of carbon fiber, carbon fiber/wood hybrid and hand crafted wood paddles for Outrigger and Dragon Boat Racing, and for Stand Up Paddling. From 2006 to 2008, KIALOA experienced tremendous sales growth, but the increased sales did not result in additional profits. In July of 2009, KIALOA engaged OMEP to assist them with their growing business.
In 2009, sales continued to be strong despite the weak economy; however, the company struggled in their ability to meet customer demand. Although inventory levels were high, paddle sizes ordered were often out of stock. KIALOA had grown business beyond what it could successfully support and help was needed.
OMEP’s Small Business Assessment indicated KIALOA had a good understanding of their product costs, financial landscape and marketplace; however, several opportunities for improvement were identified.
- OMEP determined that adoption of Lean principles in operations, production, and supply chain management could greatly enhance KIALOA’s business performance.
- KIALOA implemented Lean flow concepts to establish ‘Build-to-Order’ practices
- Value Stream Mapping helped identify and eliminate waste in production
- KIALOA became equipped to better meet customer demand while simultaneously reducing excess inventory
- A mutually beneficial supply chain management system was developed to deliver components at the right time at the right levels
- A new Capacity/Production Planning tool supported full employment, improved cash flow, and reduced out-of-stock situations
- Production efficiency improved 20%-30%
- Build-to-Order methods reduced standard lead time from 2 weeks to 1 day
- Suppliers replenish product on a ‘pull’ system based on product sold during the previous week
- Addressing 2009 ongoing supplier stock-out issues resulted in sales increases of 55% and 79% in July and August 2010 over 2009 levels
We are currently a company of ten people, but we have many of the same needs that a larger company has. Smaller companies do not typically have the money to hire positions that our OMEP consultants filled… without OMEP we would not have been able to access the information.