Herculean Results

After 13 years, Foldcraft Company’s lean efforts continue to produce staggering benefits.

BY KATE PETERSON

Brian Kopas, vice president of operations.

In 1998, a handful of managers, engineers, and operators at Foldcraft Company took the first step on a lean journey that, well into its second decade, is still yielding remarkable results. That August, the group undertook Foldcraft’s first ever kaizen event. It studied lean principles, applied them to an existing production process, tore down that process, rebuilt it, and trained operators to use the new system—all in five days..

Foldcraft had such stunning outcomes from this kaizen event—with double-digit improvements in all the areas it measured—that it might have been tempting to stop there. After all, the process it targeted was one of the foodservice furniture manufacturer’s staple products: contour seats.

Instead, Kenyon-based Foldcraft pursued its lean efforts with incredible fervor during the past 13 years. The company has conducted more than 150 kaizen events and maintains a growing arsenal of ongoing efforts to complement kaizen. And while many might think lean would run its course after more than a decade, Foldcraft’s lean efforts seem to become more effective over time.

How Lean Took Hold
Foldcraft began as a millwork operation in 1948. It wasn’t until the early 1970s that it entered the foodservice furniture market. The 220-employee company, which does business as Plymold, now counts International Dairy Queen, Subway, Panera Bread, Culver’s, and Jack in the Box among its customers.

Given its industry, Foldcraft could be susceptible to overseas competition—and in fact, it does face stiff price competition. But the company’s lean journey has kept it competitive and flexible enough to anticipate and satisfy changing customer demands. “You’d think with the product they make it would be made offshore for the cheapest price. But they make the highest quality and offer the fastest delivery,” says Bob Kill, President & CEO of Enterprise Minnesota, who cites Foldcraft as one of the best examples he knows of a company completely transforming itself using lean principles.

Foldcraft’s commitment to lean really deepened in 1997, when Brian Kopas, the company’s quality manager at the time, read an article entitled, “Kaizen Blitz.” Kopas had joined Foldcraft in 1993, and while the company had an improvement program in place he wasn’t satisfied with its results. With its description of the outcomes companies had experienced, the article on lean and kaizen really caught Kopas’s attention.

Kaizen, a Japanese term derived from the words “kai” which means change, and “zen” which means good, describes business process efforts that result in change for the better. But that definition hardly does justice to what was in store for Kopas and Foldcraft. They embarked on a journey that would totally alter their way of operating every facet of the company.

One of the companies mentioned in the article was Pella, the Iowa-based window and door manufacturer; Kopas had worked with Pella’s quality manager in a previous job. “I’m a bench marker. If there are smart people solving the problems we’re trying to solve, I want to know about it,” says Kopas, now Foldcraft’s vice president of operations. “So I called this contact at Pella and he said I could come down and visit them, but with one requirement. I had to bring the CEO.”

The idea behind that stipulation, Kopas says, is that companies that enjoy true success with lean know you can’t get dramatic, ongoing results without buy-in from the very top of an organization. “At some point, without that support, you run into a wall,” he says.

Foldcraft CEO Chuck Mayhew jumped on board, and a small delegation from Kenyon headed to Iowa to witness lean and kaizen in action. Shortly after, Kopas participated in one of Pella’s kaizen events. With the information and experience gathered from Pella, Kopas initiated Foldcraft’s first kaizen event.

In a typical kaizen event, 10 people comprise the cross-functional team, Kopas says. About one-third of the people are process employees, one-third are support staff such as leads and manufacturing engineers, and one-third have little to do with the area under review. They might come from sales or finance, for example.

“We try to have at least one person from outside the company on events also,” says Kopas. “Usually it’s someone who has some competency in the area but none of the blind spots that come from being inside the company.”

The events take a full work week. Monday is a classroom day, spent learning about lean production concepts 24 ENTERPRISE MINNESOTA DECEMBER 2011 and the specific goals and objectives of the event. On Tuesday morning the group observes the existing process. “They do a quick and dirty time study,” says Kopas. “They’re out there with stopwatches in teams of two, focusing on operations and operators.”

The team regroups on Tuesday afternoon. The participants compare notes and, working into the late afternoon and evening, develop an entirely different production process. On Wednesday, they begin disconnecting equipment, taking the process apart and putting it back together again according to the new design. They call in electricians, maintenance staff, and tool and die people to completely rearrange the manufacturing area.

“The goal is that on Thursday morning, we can begin training on the new process, run it, and do the finetuning,” Kopas says. On Friday, the team reports to senior management, and everyone in the company is invited to attend that presentation.

For Foldcraft, the company’s first kaizen event yielded spectacular results. Its new process led to a 25 percent increase in productivity, a 50 percent reduction in floor space, and a 66 percent decrease in work in process.

Beyond the shop floor
It wasn’t long after the first round of kaizen events that Foldcraft discovered manufacturing improvements were limited unless the company also made improvements in business processes. “Most folks start on the shop floor, where most of their people and resources are,” Kopas says. “Once the changes are in place, they realize they can make the product faster than they can enter the order.”

So in January 2000, Foldcraft underwent its first business process improvement event. “This does work for business processes too,” Kopas emphasizes.

One of the company’s great success stories in business process improvement is the week-long event that relieved a huge burden from employees like Julie Arnold, the manager of the International Dairy Queen account. Before the change, Arnold oversaw the quote and order-entry process by making individual contacts with relevant Foldcraft employees such as engineers or order-entry operators. As one element of the process was completed, the employee would send it back to her, and she would move it along to the next step.

Since the change, Arnold’s entire cross-trained team of 11 meets every morning to assess the status of each customer request, dividing up responsibilities to ensure the tasks are completed within the lead times established by the team members themselves. “We meet again midafternoon. If anyone is behind, others can pitch in and help get everything done,” Arnold says. “We put it up on the board, and someone grabs it and tracks progress on it in an electronic file that everyone else has access to.”

The change has been dramatic. Arnold’s team handles the International Dairy Queen account, everything west of the Mississippi and in Canada, plus another national account—and their volume is higher than ever. Despite the added workload, employees’ stress levels have actually fallen, Arnold reports.

Other efforts that complement kaizen have followed naturally as the company continued its lean journey. Realizing that certain process changes would require specialized equipment, Foldcraft created a “process build” team to design and create this customized equipment. The company also recognized lean’s ability to help customers, so it launched a lean product development program. Through this initiative Foldcraft gathers input from customers and helps them fulfill their brand image with customized products and services.

While Foldcraft holds kaizen events about every 30 days, on average, management also learned that they didn’t want to wait between events to make improvements. That’s why the company established systems to ensure daily review and improvement of processes. Foldcraft also developed a full week training program for all new hires to ensure complete understanding of the company’s commitment to continuous improvement, as well as the tools and systems it uses to achieve its lean goals.

Fruits of their labors
During Foldcraft’s 13-year lean journey, lead times have dropped 66 percent, floor space requirements have fallen by 50,000 square feet, productivity has increased 240 percent, and the company’s on-time percentage has jumped from 95.2 percent to 99.5 percent.

While the measurable benefits of Foldcraft’s lean endeavors are certainly impressive, the abstract benefits are equally critical. To an outsider, employee morale at Foldcraft is particularly striking. Jill Julich and Donna Knobel work in Foldcraft’s Bloomington facility, which houses upholstery, stainless steel, and millwork production cells.

Knobel is a production supervisor, overseeing the stainless steel and upholstery cells; Julich is a cell coordinator for upholstery. Julich originally worked for the upholstery company that Foldcraft acquired several years ago. The change with lean has been dramatic, she says. “Before, someone made the seats, someone else the backs, someone the base, and somewhere along the line, they were all put together,” Julich says.

“All these racks would fill up and you would just go and get what you needed when you needed it. Each person had their own bench and they worked in their own little world and they really didn’t work together,” Julich recalls. The facility produced an average of five to 10 booths per day.

Under lean, Foldcraft has moved to one-piece work flow, so the booths move through the production process without stopping. Each operator adds his or her element, right up until boxing for delivery. Today the facility makes an average of 38 booths per day with the same number of people.

Employees love the change, Knobel says, because lean has made their jobs easier. “They are no longer working like mad all day long and never getting anywhere,” she says. “They are all cross-trained so they are not doing the same thing all day, every day. And everybody works together. If someone is having a hard time, the rest of the [employees] support that person.” Even huge orders don’t cause anxiety. “Actually, I get after sales and tell them we need more orders. Because of the cross-training we can rotate operators where we need them to be and finish whatever needs to be done.”

Knobel particularly loves kaizen projects. Last summer she was part of a team that ran kaizen events to establish the process for a new stainless steel cell. It involved moving around other cells to find the best arrangement. “Those events helped us set up stainless steel, but also helped us better the current upholstery lines. Every line we put our hands on during those five events has shown improvement,” she says with pride.

Elements of Success
Several elements of Foldcraft’s lean journey have made it both successful and enduring for the company. First, Foldcraft’s top management has been involved—not just supportive, but actively involved—in the lean effort from the very beginning.

In addition, Foldcraft has never used lean purely as a cost-cutting or quality tool. Instead, lean supports the company’s carefully crafted and articulated strategy. So, while the first lean efforts were directed at the manufacturing floor, the company quickly saw their applicability in different business processes, allowing the benefits of lean to permeate the organization.

Foldcraft is 100 percent employee-owned, motivating the entire organization to make lean work well. Combined with the company’s policy against layoffs that result from improved productivity, Foldcraft has created a culture in which employees willingly embrace changes.

Finally, because the changes at Foldcraft are so deeply engrained in the company’s culture, from bottom to top, everyone is on the lookout for ways to improve. Enterprise Minnesota’s Bob Kill puts it this way: “Because of the dramatic culture shift, they see things we don’t see. They see improvement opportunities that you don’t see unless you’ve been on the journey.”