North River Boats is one of the largest heavy-gauge aluminum boat manufacturers in the United States, and has a diversified customer list which includes the U.S. Navy and Coast Guard, commercial customers, as well as state and county municipalities. The company also produces an extensive line of heavy-gauge recreational boats, and is the fastest growing manufacturer of these vessels in the Western United States.
In February 2013, North River Boats completed the purchase of a large manufacturing facility in Roseburg, Oregon. This enabled the company to consolidate four manufacturing locations into a single efficient location and to substantially increase its manufacturing capacity. The resulting improvements in productivity increased capacity through greater efficiencies and improved the company’s competitiveness.
Revenue at North River Boats has tripled in the five years since Hutchings took over as CEO in mid-2012. Early on, Hutchings recognized the opportunity to maximize growth and increase productivity by implementing lean practices. A core group of the company’s employees stayed with the company through the great recession. After the purchase, these dedicated individuals, as well as new team members, committed to helping the company satisfy the enormous pent-up demand for North River products. Improving capacity was quickly identified as essential to the continued growth and success of the company.
Consultant Kristi Smith (now with Stepwise Solutions) and the OMEP team began with Value Stream Mapping (VSM) and implementation coaching to North River Boats’ leadership team and key employees, with the goal of developing the company’s learned competency to sustain lean improvements. OMEP’s main objective was to equip the North River team with the skill set needed to identify, develop, and implement continued Value Stream improvements as the business grows and changes.
After value stream mapping, OMEP performed a Lean implementation with the operations team. This implementation included assisting and coaching North River Boats’ leadership in the development and implementation of the future state Value Stream Mapped flows to synchronize and balance boat production flows. From releasing the production order to shipping the product, the VSM’s defined layout change requirements needed to increase the capacity in each production department, as well as identifying constraints to future capacity levels.
To engage all employees in the change process, a ‘Kaizen Newspaper’ or Idea Board was implemented. This tool served as a communication conduit from front line employees to top management, and gave voice to the ideas the employees had for improving the production processes. With this implementation, employees felt they were heard and continue daily to contribute ideas that translate to bottom line improvements.
By making these changes, North River Boats has experienced great success, including three million in new sales and 20 new jobs directly attributable to lean practices. In addition, the company has realized over $250,000 in cost savings, and more than doubled the capacity of its small boat department. In recognition of the employees’ contribution to the company’s success, North River recently begin transferring ownership of the business to the employees through an Employee Stock Ownership Plan (ESOP). With its iconic brand, passionate customer following and extraordinary employee-owners, North River Boats is well positioned for continued success.
North River Boats has benefitted tremendously from the lean manufacturing techniques learned through its engagement with OMEP. Kristi Smith took the time to get to know the people and processes of the company, and North River will profit from her efforts for years to come.