Batesville Casket Co., Batesville Operations Batesville, Ind.
Employees: 780, union
Total square footage: 521,000
Primary product: Metal burial caskets
Start-up: 1959
Achievements: 73.1% reduction in returns as a percent of production since 2002. Excellence Achievement Award from National Safety Council for 1 million work hours without a lost work day in 2005.
At Batesville Casket Co., there is a keen awareness that the plant's production is ultimately dependent on tragedy, acknowledging in its mission statement a goal of helping families at the most difficult time of their lives as they honor someone they loved. Although Batesville Casket has a dominant position as a maker of metal and hardwood burial caskets, it is as susceptible to market forces as any other manufacturer.
For instance, a trend toward more economical funerals has seen families choosing cremation urns over traditional burials in some cases, and a preference for the lower-priced metal caskets over hardwood caskets. There's also the growing competition from foreign suppliers and their lower-priced products. On top of that, no two caskets are ever exactly alike, with numerous features and options available to Batesville Casket's 16,000 funeral director customers. The company is under a continual challenge to build non-standard products that look like standard products, points out John Harmeyer Jr., controller.
"Diversity is a competitive advantage," explains Doug Kunkel, vice president of operations, as Batesville produces more than 325 SKUs in the casket assembly plant with numerous possible combinations that can be custom ordered. Casket production is based on a scheduling system that is updated twice daily on a demand-pull system. The company's ability to meet just-in-time demands from its customers is a testament to the flexibility Batesville has built into its assembly operations.
Since 1992, Batesville Operations has adopted continuous improvement principles, based on the Toyota Production System model; in fact, the company has its own internal continuous improvement culture, the Hillenbrand Business System (Batesville Casket is a subsidiary of Hillenbrand Industries). A key component of its daily continuous improvement actions is a program centered on Daily Improvement Target Countermeasures Analysis (DITCA).
Every week, typically at a lunch meeting, Batesville associates present DITCA reports that identify specific solutions they developed to deal with a plant situation. Individually, each DITCA may only impact a handful of plant workers -- upgrading to a different type of industrial glove, for instance, or altering the frequency of scheduled maintenance on a machine -- but all told, Batesville has saved more than $1 million annually for the past four years from these DITCAs. What's more, the company's safety record was recently recognized by the National Safety Council for 1 million work hours without a lost work day in 2005.
"We rely on our associates to get products made on time, with the right quality," explains Todd Dennis, director of Batesville Operations. "Our associates aren't shy about telling us what we ought to be doing. They run this business as if it were their own."
Batesville has gained a reputation well beyond the casket manufacturing business, as companies in industries as diverse as bottling plants, agricultural machinery and cabinet makers have benchmarked themselves against Batesville's operations.
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Communicating Throughout The Supply Chain
Batesville Casket Co.'s Batesville (Ind.) Operations produces more than 325 standard model caskets on a mixed-model production flow. The plant uses JD Edwards enterprise resource planning (ERP) software from Oracle Inc., which provides visibility of inventory and demand across the organization.
For instance, after a casket is assembled, a scan of the casket's bar code compares the model to the shipping requirement in the ERP system. This indicates whether the casket should be loaded on a truck or temporarily stored in the plant's automated warehouse for future shipping. From there, the casket is shipped to a logistics network of over 90 customer service and regional distribution centers, and then on to the individual funeral homes.
By collaborating with a key textile supplier, Batesville was able to improve its logistics operations through use of a drop-and-hook system at the supplier's warehouse. Rather than having its truck drivers wait while the supplier loaded the trailer, Batesville now will drop an empty trailer off at the supplier's facility and then pick up a full trailer that was loaded earlier. Not only has this eliminated wait time at the warehouse for the driver, but it has also helped the supplier reduce the amount of time it spends handling material and carrying inventory.
Staying Close To The Customer
At Batesville Casket Co., headquartered in Batesville, Ind., continuous improvement is embodied in the philosophy of "a 50% gain now is better than a 100% gain later."
"We're never satisfied," explains Todd Dennis, director of Batesville Operations. "I've never felt that we're pleased where we are. A 50% quality improvement gets us to recognize that somebody else is still doing something better. Although we're No. 1 in our industry, we're very aware that our competitors want to make us No. 2. So we can't sit still. We have to continuously improve; otherwise, somebody else will find a better way to do it."
The company's mission is: To be a synchronized team that delivers flawless products of the highest value to meet customer demand. Batesville's funeral director customers face a value-conscious consumer marketplace that is increasingly opting for cremation urns and metal caskets rather than the higher-end wooden caskets. As a result, Batesville has had to adapt its production processes to become flexible enough to meet the just-in-time demands of its customers.
"Our efficient lean production is one of our biggest competitive advantages," notes Doug Kunkel, former vice president of operations. Like virtually every other American manufacturer, Batesville faces low-cost competition both domestically and overseas, so it strives to stay as closely connected to its customers as possible. That includes using feedback mechanisms such as customer evaluation cards, telephone surveys, and customer meetings at the corporate Customer Service Center. This customer information is posted daily on performance bulletin boards and thus shared with all Batesville associates.
