The ramp-up in commercial-aircraft production has been a boon to EDAC Technologies Corp. -- so much so that the Farmington, Conn.-based manufacturer of jet-engine components and assemblies likely will max out its capacity by the middle of 2013.
Spurred by a record backlog, EDAC in February announced that it purchased a former GE manufacturing facility in Plainville, Conn., to consolidate four of its existing Connecticut operations.
In addition to the $2.65 million that EDAC paid for the facility -- which the company expects to recoup from the sale of its existing properties -- EDAC plans to spend $3.8 million on new equipment and other site improvements.
President and CEO Dominick Pagano says he expects the consolidation to deliver "some synergies and efficiencies" by having maintenance, quality control, human resources and other functions housed under one roof.
|Pagano: Lean is an "essential" tool for EDAC to stay cost-competitive.|
Pagano also sees the consolidation -- which, by the way, does not involve any layoffs -- as a move that will help EDAC create the lean culture that he envisions. In a business rife with pricing pressure, Pagano sees lean as an "essential" tool for the company to stay cost-competitive and survive.
After several previous lean efforts failed to take root, Pagano in December created an executive-level post to "really take [lean] to the level."
"His mandate was to give me a full gameplan by the first of the year, realizing that it's going to take a year or 18 months to get there," Pagano says. "And that's when I need it most because of the ramp-up in our parts delivery on some of our current [long-term agreements]."
Pagano notes that the company already has seen a ramp-up in production of the Boeing 777, for which EDAC supplies cowls and forward aft cases for the jet's GE90 engine.
To give EDAC the flexibility to respond to such ramp-ups, the company plans to increase its use of cellular manufacturing in the Plainville facility. Pagano sees the 181,000-square-foot facility as a "blank slate to lay out the plant in a cellular mode." Although EDAC employs cellularization at a few of its sites, Pagano notes, the new facility "will allow us to optimize it to the maximum."
"So this new facility allows us to do a ground-up consolidation of the divisions, but also, more importantly, to be able to think ahead in regard to lean and continuous improvement and cellular manufacturing," Pagano says.
It also allows EDAC room to grow. Over the next year or two, Pagano expects EDAC to add 30 to 50 people to its existing workforce of 350 employees, as he says the extra capacity should enable EDAC to scoop up contracts when other suppliers are stretched too thin.
"Because not too many [suppliers] are aggressively investing in capital equipment and infrastructure to support the anticipated growth," Pagano says. "Having excess capacity allows us to react with a lot lower inertia and capture some additional business."