When a manufacturing company decides it needs to trim budget fat, the workers closest to the action are often the ones who have the most practical ideas for ways to do the company’s line work more efficiently. Thus, employee communication becomes even more important than usual. Mechanisms are needed to help push the workers’ ideas up the command chain to the decision-makers who have the clout to set those notions in motion.
MBX Systems, a Chicago-area technology manufacturer, exemplifies how the smooth flow of information between line workers and executives can help a company trim fat quickly.
MBX, which makes custom appliance platforms for software vendors, has been growing fast. The company reported 27% revenue growth for 2012. And last October, MBX expanded its manufacturing space eightfold with a move from its former headquarters in Wauconda to a larger facility in Libertyville.
To help create a leaner culture in the midst of this expansion, CFO Len Petty implemented a lean-oriented campaign called Net Driver to solicit ideas from MBX’s department heads for ways to work more efficiently. The program began in January, and it has already produced a number of efficiency improvements for MBX.
One such improvement is a new workstation format dubbed Super Cell that has increased MBX’s manufacturing throughput.
"Super Cell allows us to increase the speed and volume with which we configure our servers," Petty says. "The idea came from our production people. It’s a way of concentrating work activities so they’re in a smaller area with less touch time and less moving around. It has really helped us. We use less labor and we have less overtime. Based on labor hours, we have about a 5% improvement in efficiency. We estimate this setup alone is saving us between $17,000 and $18,000 a year."
Other efficiencies the Net Driver program has produced include an improved system to build small orders by having one builder handle them from start to finish, and a new vendor management process that has driven down material costs.
"We’ve been working with our vendors and our engineering department to consolidate our SKUs, and leveraging that with our vendors to get the most efficient purchase process out of it," Petty says.
MBX’s executive team plans to evaluate the Net Driver initiative this fall to see if they want to continue the program in the same format or make changes to it.
"I have a feeling we’ll stay with it," Petty says. "It’s really just another way for us to have a more efficient, healthy business. It keeps everybody involved. It keeps us innovating and looking for better ways to do things. And we’re seeing the results of these cumulative efforts in our bottom line."