Viewpoint -- Casualty Of Cost

Sunrise Medical in Avon Lake, Ohio, incorporates error-proofing to compete with the Asian market, but ultimately loses.

As a business journalist, I have seen my share of companies close their doors due to competition. On some level I am desensitized to the almost daily occurrence. I liken it to what a funeral-home director must feel. Death is a tragedy, but if you deal with it day-in, day-out you aren't shocked by it anymore. Still, there are times when it pains me to see a company fail. In early July I visited Sunrise Medical in Avon Lake, Ohio. It was my second visit. The first time was during a Best Plants conference series hosted by IndustryWeek and the Association for Manufacturing Excellence. I decided to schedule a second visit when I saw the great things that the plant was doing to battle cheaper products coming out of Asia. I wanted to get a story on the company's best practices -- specifically its poka-yoke initiatives. I got my story and even submitted it to the magazine for inclusion in the October 2004 issue. Indeed, here's how the story started:

Scrap is a four-letter word in Ken Murphy's book. The director of operations at Sunrise Medical's mobility products division in Avon Lake, Ohio, is an error-proofing enthusiast to the nth degree. His 44,400-square-foot plant, which makes wheelchairs that cater to severely handicapped children as well as the elderly, is peppered with machines emblazoned with placards stating, "This Machine is Poka-Yoke." Murphy's passion began a few years ago when the Asian market started flooding the U.S. with inexpensive wheelchairs. "We had to get serious about lean to get our costs down," says Murphy. "We were fighting such odds." Indeed, wheelchairs from Asia sell for one-tenth the cost of a chair made at Sunrise Medical. The only saving grace: Sunrise chairs are custom made from requirements sent in by a patient's physical therapist. Additionally, many of the models that Murphy's plant makes can be shipped within 24 hours. "Options and features are made for a specific person, you can't get that with mass customization. [With other wheelchairs] people aren't getting their needs met," says Murphy. While customer service was on its side, Sunrise Medical still needed to address costs. That's when Murphy started the poka-yoke initiative. "It's amazing what you can do and save through error-proofing," says Murphy.
Despite all of the doing and saving, the Avon Lake plant's days were numbered. The corporate edict was delivered in July: "The current business environment demands that we provide top quality products at competitive pricing," stated a corporate press release. "In order to meet our customers' needs we continually have to evaluate ways to streamline our operations to provide our customers with cost-effective solutions. As such Sunrise Medical has decided to close the Avon Lake facility. . . . Sunrise Medical has explored every possibility to effectively utilize the Avon Lake facility. Unfortunately, we have not been able to find a suitable solution." I know there are unpopular decisions in business. And I realize that lower-cost countries pose great challenges to U.S. manufacturers. I also know that for the greater good, sacrifices must be made. What I didn't bargain for was how it would make me feel when a manufacturer that I championed as a role model for manufacturing best practices is forced to close its doors. The best practices that I outlined in my story included using a $1 pin on a notching machine to reduce machine scrap from 15% to zero, saving the plant hundreds of dollars a year. Another poka-yoke method that helped Sunrise survive as long as it did was a quick-changeover device. Sunrise wheelchairs have several different widths -- from 14 inches to 20 inches. In order to make specific parts for each chair, operators needed to set up the machine and inspect the parts to ensure accuracy. The old changeover method took about an hour to do. To justify the time spent, several hundred parts were run through the machine. This was counterproductive, considering only 20 or so parts actually were needed. Another counterproductive measure: dedicated machines. While the machines didn't need changeover or rigorous inspections, they weren't always being used. To remedy the situation, Murphy had his on-site engineers build a machine with a knob that can be moved to a specific measurement. A stop ensures that the part will be punched at exact points prescribed by the machine operator. Now changeover takes 10 seconds. Alice Whiting, a machine operator and seven-year employee of Sunrise, was so pleased with the results that she made the engineering department a batch of apple dumplings to show her appreciation. Now Alice and the rest of the team at Sunrise Medical are left with little more than memories of hard work and apple dumplings. At least one doesn't leave a bad taste in your mouth. Traci Purdum is an IndustryWeek associate editor. She is based in Cleveland.
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