In an unassuming Minneapolis warehouse, brake press operators form doors that will enclose a computer worthy of NASA scientists. Sparks fly as expert welders fuse together the casing for a 3-D modeling machine. Nearby, workers in the paint area spray finishing touches on the
shell for an electronic highway message sign. From cash door fronts to retail displays, electrical box components to the metal parts of a milling machine, if it's made of metal, chances are it can be made by Atlas Manufacturing.
Atlas Manufacturing, a precision sheet metal manufacturer, has been in business for half a century, and its diverse customer base serves as evidence. Purchased by co-presidents John Peterson and Mark Engel in 2002, the company designs, engineers and builds custom metal
products for a variety of original equipment manufacturer clients across the telecommunications, retail, medical and industrial product markets.
Lean Sales Inspire a Lean Journey
Echoing a trend felt across the U.S. manufacturing sector, the recent recession had put a damper on Atlas' annual sales numbers. For projects the company did land, customers requested shorter lead times, asking for some orders in as little as three days. Producing quality
products remained a given, but competitive pricing also was crucial to the company's success in the Twin Cities metro area, which houses an abundance of custom metal manufacturers.
Jay Frost, quality manager at Atlas Manufacturing, says the change in customer requests served as a catalyst for Atlas' lean journey. "[Customers] now want shorter lead times and they want exact quantities," he says. "They aren't willing to pay for things that aren't
value-added, so we needed to change our processes to [please] our customers."
Though Frost and Peterson were familiar with lean, they were uncertain whether a lean approach would be right for Atlas' job shop environment. As a custom manufacturer, the company does not have a set run of products to complete. Therefore, building processes tend to differ
with each order. When sales remained sluggish last winter, however, Frost and Peterson took the plunge and called Enterprise Minnesota to help them launch lean at Atlas.
Kent Myhrman, a process engineering specialist for Enterprise Minnesota, led a dozen Atlas employees representing key areas of the business through a crash course on the features and benefits of lean. Myhrman emphasized how minimal waste and maximized efficiency paired with
best-in-class equipment would bring the most value to the customer and, over time, the best profit margin to the company.
Peterson says workers' initial response was hesitant. In particular, veteran employees wondered whether a shift in processes and a splurge on new equipment would reap significant benefits--especially after so many years of success with their existing process method. In the
end, the recession itself was the biggest boon to getting workers on board with lean. "Having all these changes in the economy made it easier to get people's attention in our company," Peterson says. "[They realized] that maybe we need to do something different, because it's
very tough economically. They see the papers, so they know what's going on."
To show how lean thinking can benefit everyone, Peterson organized a series of lunches with employees from each area of the shop floor. At each lunch, he asked participants what would most help them become more efficient. To workers' delight--and in some cases, their
surprise--the company realized a large handful of those ideas within a period of months. "[Employees] bought into [the lean concept] more when they've suggested some ideas, and we've actually implemented them," Peterson says. "I think that's motivating."
Stronger communication companywide has spawned a myriad of improvements throughout the facility. In the brake press area, tools that were once elusive are now easy to find thanks to a color-coded system initiated by a brake press operator. In search of an easier way to decide
which order to work on next, the brake press operators also developed a fi le system. Several plastic files secured to a nearby wall now keep orders organized by urgency and necessary skill level. "[Employees] used to just file through all of the jobs and pick what they wanted,"
Peterson says. "[Now] they can just grab the next order, and orders are scheduled [and organized] based on when they're due."
In the paint shop, another employee suggestion resulted in a new climate-controlled room for storing temperature-sensitive paint containers. "Because [they're spraying] powder, if it's not in a controlled environment, it'll clump and won't flow nicely out of the gun, which
causes all kinds of quality issues," Peterson says. The new climate-controlled storage space prevents the paint from developing a sticky consistency.
Equipment and process improvements helped Atlas Manufacturing accommodate customers' shorter lead times more easily than ever. While lead times for many orders dropped to three or four days, Atlas' on-time delivery rate stands at 96 percent. High-efficiency fluorescent bulbs
provide better lighting at a cheaper price with a return on investment of less than one year. The lighting overhaul also illuminates a shiny collection of new machines dotting the production floor. A state-of-the-art laser cutter purchased in December is three times faster than
Atlas' previous laser cutter, and it can cut through thicker material.
The company's spending strategy was to "look for ways to combine processes that would save time and money and would speed up the delivery for a part," Peterson says. For one such combination, Atlas purchased equipment that feeds sheet metal from its inventory selection into
its punch press machine. This allows the press--the fastest in the world to date--to continue working on projects unattended.
To avoid end-product reworks, the company bought a laser that measures each piece of cut metal according to preset specifications for digital accuracy before being formed into its final shape. The laser catches any measurement errors early in the production process, which
saves workers valuable time.
Workers are cutting down production time by making the exact number of parts specified, versus the traditional protocol of manufacturing more parts than an order calls for in case the customer orders more product at a later date. "Traditionally we'd build five percent over,
because we'd always want to be sure that the customer got what they wanted," Peterson says. "We ended up with half of this warehouse [of surplus inventory] that we couldn't sell, but ... we've done a lot better as a result of trying to make more exact quantities. It's just like
in lean. If you have less inventory, you have less cost." For Atlas, reducing inventory has even allowed the company to sell a nearby 10,000-square-foot building it had purchased solely for additional storage space.
To free up even more cash, the company extended lean efforts to its supply chain. Atlas recently teamed up with suppliers to develop a Kanban system. Instead of having cash tied up in surplus inventory, Atlas can request smaller deliveries of parts it needs and get them
quickly, often the next day. The small parts supplier even provides a rack of parts at Atlas--a veritable parts "store" right on the shop floor. When an Atlas worker needs more of a particular small part, he will scan the bag of parts with a scanner that is connected to the
supplier. That bag then becomes property of Atlas, and Atlas is charged for it during the next billing cycle. This way, Atlas can purchase parts immediately when it needs them and not a moment before.
A Product of Its Own
In 2007, Atlas Manufacturing singlehandedly bolstered its revenue stream and diversified its range of product capabilities through the purchase of an adjustable height sink company, aptly named Adjust-A-Sink. Founded by a hairdresser-turned-entrepreneur, Adjust-A-Sink's
product is an adjustable height sink for washing hair. Instead of each person adjusting to the height of the shampoo bowl, Adjust-A-Sink can be raised or lowered by 12 inches to accommodate the varying sizes and abilities of each customer.
Dave Shusterich, president of Adjust-A-Sink, says the product offers dignity, comfort and safety for salon-goers with limited mobility. "It's a proven fact that pressure on [the back of] your neck against a [typical] shampoo bowl could cause a stroke," Shusterich says.
"[Many] senior care facilities have a salon, and the majority of people coming into the salon are in wheelchairs. Using the Adjust-A-Sink, they can stay in their wheelchair, and they can be comfortable, safe and dry."
Synergy between Atlas and Adjust-A-Sink is evident in Atlas' ability to manufacture many of the metal parts needed to form the Adjust-ASink. The companies operate under individual names, but they share one building. Adjust-ASink outsources its inventory and quality assurance
duties to Atlas, which allows Adjust-A-Sink employees to focus solely on sales and marketing. This arrangement benefits both companies' bottom lines.
Despite the economic downturn, the in-house product led to steady business and is quickly becoming popular in assisted living facility salons throughout Minnesota and across the country. The company has installed 120 units in Minnesota and nearly 2,000 nationwide. "But there
are 50 to 60,000 senior care facilities in the United States alone, so you can see that our potential is huge," Shusterich says. The product also has begun to enter high-end salons seeking a more comfortable hair washing experience for customers.
The next stage in Atlas' lean journey will be a Kaizen event to streamline its office processes. "We've gotten down to where we can produce something faster than we can quote it, enter it, design it and get it to the shop floor," Peterson says. As the business continues to
receive smaller orders with quick turnarounds, a more efficient order processing system will help the company to accept and deliver on more orders.
While further lean efforts remain undetermined, continuous communication will be key in maintaining current and future improvements, Peterson says. Publicly displayed reports detailing key performance metrics, whiteboards for communication within individual work cells and
regular team meetings will continue to keep the company's work force united under a common vision.
"It takes a lot of energy and a lot of work to keep communicating, but that not only keeps people on the same page, it keeps them motivated and we get better results," Peterson says. "[Lean] is really an evolution, and I don't think there's really an end point. You've
just got to keep at it."