Lauren Manufacturing Co., a rubber manufacturer that supplies standard and custom-extruded and molded sealing solutions, had a difficult choice to make in 2002. The company was facing tough competition from around the globe, and the competition was starting to catch up to Lauren Manufacturing in terms of technology.
"Lauren recognized the difficulty and rather than waiting to be exterminated by the competition, we decided to take a fresh look at things," says Scott Peters, vice president of sales and marketing. "We went from what was a traditional American manufacturing mentality to a lean approach."
In December 2002, the company, located 90 miles south of Cleveland in New Philadelphia, Ohio, moved away from batch-and-queue manufacturing. To aid in the lean journey and to ensure that its union employees were all on the same page, Kevin Gray, CEO of Lauren Manufacturing's parent company, Lauren International Inc., primed the pump with a letter to employees announcing the "concept of change."
In part, the letter stated that eliminating waste was the way to stay ahead of the competition. Gray also noted, "We have to break down the mental walls between divisions, departments and even individual job assignments."
The upfront communication enabled Lauren Manufacturing's management to stress to the workforce the importance of embracing lean, says Lisa Huntsman, vice president of operations.
To get started, the company benchmarked several successful lean companies.
"The initial benchmarking is critical," says Peters. "But just as critical is that we continue to benchmark, continue to work with customers of ours that have lean practices."
Huntsman also notes that an outside consultant "got us into the mindset of how streamlined you can get it if everything is in pull production versus pushing everything to the next step."
The next task was to reorganize the facility. Huntsman explains that the plant split up its two traditional departmental functions of the facility -- a bulk extrusion group and a finishing department. It then re-organized the plant, except the skilled maintenance and tool-and-die positions, into five business units (now it's six). Jobs were re-classified with the union leadership, and all direct-labor positions were re-bid based on seniority.
The transformation truly made a difference.
"I think this company would still be doing $40 million [in sales] and it is now at $52 million," says Huntsman. "I also believe this facility would be busting at the seams because of all the inventory we had built up."
Lauren Manufacturing's more than 1,000 customers in four major markets -- automotive, construction, consumer goods and industrial goods -- also notice the difference.
"Our speed to market in terms of turning information around and answering customers' direct questions would not be as responsive and as fast without lean," Peters says.
He adds, "You can fool yourself on profitability.... But one thing that doesn't lie is the cash flow, efficiency of using capital and the effectiveness of the dollars that you are spending -- all of those are much more favorable in the lean environment than if we had to carry a lot of inventory to cover up for those lack of efficiencies."