Building Success One at a Time
After years of watching customers chase cheap labor south of the border, garment contractor Esther Chaing had to retool her Harbor City operation to survive.
Her strategy would contradict much of what she had learned in nearly two decades of apparel making. She would have to cross-train sewing operators in a piecework trade where workers are used to doing a single task at lightning speed. And Le Bouquet Costumes Inc. would have to make garments one at a time, forsaking the batch production that’s the backbone of the local industry.
“I was skeptical, but I had no choice,” Chaing said. “I was losing $10,000 a month and about to close my doors.”
Although the changes seemed counterintuitive to Chaing, her payoff has been soaring quality and productivity--and for the first time in years, prospects for growth.
Le Bouquet is one of a modest but growing number of small Southland manufacturers embracing Japanese-style “lean” production techniques. Long used by some large U.S. firms, the practices are trickling down to mom-and-pop companies under pressure to slash costs and boost productivity. One of the most potent weapons in the lean arsenal is “cellular manufacturing,” which is the antithesis of the traditional U.S. plant structure.
Among other things, going cellular means that goods are produced one at a time, not in large batches. Employees work in teams performing a variety of jobs rather than specializing in a single task. And the shop floor is divided into self-contained work “cells,” instead of separate departments for grinding, milling, assembly and the like.
Inexpensive and low-tech, cellular manufacturing is producing powerful results for small firms such as Chaing’s. By repositioning existing equipment and focusing on the pace of the team, not individuals, Le Bouquet is churning out garments 33% faster with fewer employees. And by making and inspecting garments one at a time, Chaing’s workers now catch mistakes almost immediately, eliminating costly rework on large bundles of apparel.
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But this unadorned strategy is tougher to implement than it sounds. Bosses must relinquish some control and trust workers to manage themselves much of the time. In turn, employees must shoulder more responsibility than they would in a traditional plant structure. Research has shown that some workers feel stressed by a system that strives to make their every movement productive. Others are suspicious that improvements will only benefit management or lead to layoffs.
So far, fewer than 20% of U.S. manufacturers have widely adopted cellular production, according to Industry Week magazine’s 1999 census of manufacturing practices. Still, experts say that’s a big increase from just a few years ago. Local proponents say lean techniques hold particular promise for Southern California’s huge base of small manufacturers, many of whom are searching for an economical strategy to battle low-wage foreign competitors.
“Moving [production] to Mexico is just a temporary fix,” said Tony Soria, a consultant with the California Manufacturing Technology Center (CMTC). “Lean is the new reality for manufacturing in this century.”
Lean production is hardly novel in U.S. industries such as automotive and aerospace, where some large companies began moving to Japanese-style manufacturing in the 1980s. “Just in time (JIT),” “quality circles” and “continuous improvement” have become standard procedure with many major manufacturers. Now they are putting pressure on their suppliers to get with the program.
Changes in the aerospace industry had TA Manufacturing Co. feeling the heat. A Valencia maker of high-performance clamps for aircraft and space vehicles, the division of Washington-based Esterline Technologies supplies behemoths such as Boeing, Northrop Grumman, Lockheed Martin and Pratt & Whitney. With these manufacturers getting lean and demanding everything faster, cheaper and better, TA was struggling to keep pace, according to Fred Gardner, vice president and general manager of TA. He acknowledges the company’s on-time performance rate of 70% just wasn’t cutting it.
“When you get that much past due, you get everyone calling you with complaints,” Gardner said. “We were sorely in need of improvement.”
After some false starts, TA set out last December to embrace cellular manufacturing with a vengeance. Working with CMTC, company officials began with the assembly line that makes a product called a “single loop clamp,” a C-shaped metal fastener fitted with a heat-resistant elastomer sleeve. When the ends of the C are squeezed together and secured with a screw and a nut, it forms a ring to hold aircraft wiring in place.
Under the old system, assemblers sat at tables piled high with the metal clamps and elastomer cushioning, working furiously to make a dent in the mini-mountains of components. Buckets of spare clamps, elastomer strips and half-filled orders littered the shop floor, making it tough to track the work in progress.
“It was a sight,” Gardner said.
Today there are no piles of extra anything lying around the assembly area. Cellular manufacturing begins with the principle that nothing is produced until a customer asks for it, so that goods are “pulled” through the system by actual orders rather than “pushed” through by a sales forecast. Thus inventory--and the money tied up in it--is greatly reduced.
Work tables and tools are now close together so that everything TA assembly employees need is close at hand. Components are stored in tidy bins known as a “supermarket” that get refilled through a systematic, visually cued process known as “kanban.” Assemblers no longer are solo artists, but rather, teammates who move around the assembly area assisting each other with multiple tasks and attacking bottlenecks. Individual clamps are inspected as they’re produced. Completed orders are immediately whisked away for shipment or temporary storage.
Since that first project, TA has converted about 40% of its plant to lean practices. The results: On-time performance has climbed above 90%. Defect rates have plunged from 10% to 0.5%. Return rates have dropped from 2% to 0.4%. And overall productivity, as measured by value of shipments per employee, has risen 100% in the single-loop clamp area and 15% companywide. With a price tag of about $30,000 so far, lean production has proved a bargain for a company that will do $30 million in sales this year.
“It paid for itself in a few months,” said Gardner, who is busy planning TA’s next lean project. “Once you start this process, there’s no stopping. It completely changes your outlook.”
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Some of TA’s 220 employees say they like it, too. Assembler Teresa Spezzia used to dread facing the mounds of components piled at her workstation every morning.
“It was hard doing one thing all day long,” she said. “This is a lot more fun.”
Experts say getting employees to buy into the process is crucial in cellular manufacturing, because it depends on workers for results, not on equipment.
One of workers’ biggest concerns is that they’ll “lean” themselves right out of a job. That’s why R.W. Lyall & Co., a Corona manufacturer of piping products for the natural and propane gas industries, began its transition in 1997 with the promise that no employee would be laid off due to increased efficiency.
Employee turnover was 80% at the time, so that promise wasn’t tough to keep, says General Manager Jon Slaughterback, a former automotive executive who brought that industry’s lean philosophy to R.W. Lyall. But as a show of good faith, management also promised to share productivity gains with employees through higher base pay, profit sharing and compensation for skills acquisition.
Slaughterback points to R.W. Lyall’s soaring on-time delivery and plummeting inventory and scrap costs as proof that lean manufacturing can work in any business, not just automotive. But he says he’s most proud of statistics related to staffing. While the work force has shrunk almost by half to 165 people--all through attrition, he says--absenteeism has plunged and turnover is now less than 3% annually. Slaughterback says R.W. Lyall will pay record bonuses and profit sharing this year, and he couldn’t be happier.
“Our goal is to pay the best wages in the industry, not the lowest,” he said. “We’re not there yet. . . . But if I have the best-paid people, that means we’re performing well and they have earned it.”
Pay is higher in many Japanese-style factories, but some experts say the plants are hardly a worker’s paradise. British researcher Rick Delbridge has spent considerable time observing employees of lean manufacturing facilities in Britain. The author of “Life on the Line in Contemporary Manufacturing” has found workers under tremendous strain to meet quality and efficiency targets. Staffing levels at some plants are so tight that employees feel peer pressure to work even when they’re sick. Some have grown resentful that every movement is scrutinized for productivity.
“One guy described JIT as ‘Japanese Induced Terror,’ ” said Delbridge, researcher at the University of Wales. “Workers find [these practices] very stressful.”
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But proponents say it doesn’t have to be that way. Lean consultant Jerry McCormick, head of Brookfield, Wis.-based J.D. McCormick & Associates, says many U.S. manufacturers still mistakenly believe that expensive equipment must be kept running at full tilt to justify its cost. That inevitably leads to production bottlenecks, because other operations aren’t running at the same pace. (Picture Lucy and Ethel at the candy factory, gobbling chocolates to keep up with the packaging line.)
McCormick says lean production brings a rhythm to the entire process that can reduce stress on workers. By slowing some operations, the whole process becomes more efficient.
Chaing says that has been her experience since making the shift to cellular manufacturing in late 1998. But convincing workers wasn’t easy. Accustomed to a system where individual speed equals higher pay, Chaing’s fastest sewing operators bolted upon learning their pay would be pegged to the performance of their team.
“I was scared,” Chaing said. “Those were my superstars.”
But the system struck a chord with the remaining workers, many of whom had been stuck doing lower-paying jobs. Working in teams with nicknames such as “Mujeres en Accion” (Women in Action), the mostly female work force earns about $6 to $7 an hour, according to Chaing. That’s well below the $10 hourly wage a few “superstars” used to command, but more than the minimum that many rank-and-filers earned. Workers say they enjoy doing a variety of jobs.
Which doesn’t mean Chaing’s troubles are over. Local apparel production continues to stream offshore, and Le Bouquet’s 45-employee work force is only half the size it was a few years ago. But her success with cellular manufacturing has Chaing itching to expand into private label. For the first time in years, she is talking about growth.
“I can see a future now,” Chaing said.
