Between 1991 and 2012, short-run injection molding company Donnelly Custom Manufacturing has soared from $6 to $30 million in annual revenues. And since 2008, industrial ventilation products company Schaefer Ventilation Equipment LLC, which is well-known for its dairy cooling systems, has tripled its sales volume. The secret behind both companies’ sensational success? A comprehensive approach to operational excellence.
At Enterprise Minnesota’s October Business Event, speakers from both companies shared how they have leveraged multiple improvement initiatives into a competitive advantage.
Donnelly’s improvement initiatives have included a mix of training, communication and mistake-proofing. The first step when Donnelly Custom Manufacturing President Ron Kirscht joined the management team in 1991 was to train more workers in proper mold changeover techniques.
At the time, one employee was trained to complete mold changeovers. Today, the company’s many certified mold operators change between 40 and 60 molds per day—more than 15,000 per year. That flexibility has come to define Donnelly and is reflected in its slogan, “How Short Run Is Done.”
Kirscht also hosts daily “war room meetings,” half-hour brainstorms to pinpoint problems that occurred within the past 24 hours. Specific meeting participants are assigned to each identified problem, with the expectation that the corrective action item will be closed within 48 hours. Since April 1, 1997, Donnelly has opened and closed about 6,000 corrective action items.
“Having a problem-solving process that is not top-down that brings a cross-functional team of people together is key,” Kirscht says. “It built pride, and it continuously improves the function of the organization.”
Lean 101 training for every Donnelly employee has also improved processes through more than 100 lean improvement events. Any employee may suggest an improvement. In addition, Donnelly has taken a proactive approach to problems, “judiciously mistake-proofing” its processes by considering the risk to the customer’s company. The riskier the potential problem, the more the company invests in a solution to avoid it.
Schaefer Ventilation Equipment LLC President Neil Crocker attributes much of Schaefer’s operational excellence to its organizational excellence, which began with a restructured plant layout in partnership with Enterprise Minnesota. Crocker says the new layout maximizes capacity and efficiency, and has allowed Schaefer to bring its short-run metal product fabrication in-house, a move that has boosted the company’s ontime delivery rate.
Crocker says the company’s commitment to defining and regularly improving upon seven “s’s” has also been essential. The seven s’s are superordinate goals, structure, strategy, systems, style, skills and staff. Systems is particularly important to Schaefer, Crocker says, because it includes a string of regular meetings on topics like sales, problems, and product development that keep employees up to date on the state of the company, and continuously engaged in taking actions to improve it.
Skills are another essential “s” for both the company and its customers. In addition to bringing its short-run metal products fabrication in-house, Schaefer has built upon its exporting skills to grow from an “accidental” to a “strategic” exporter, defining Middle Eastern countries like Egypt and Turkey as its ideal international markets. To serve a wider customer base, the company has recently become trilingual, as well, with English, Spanish and Chinese speaking capabilities.
Schaefer’s organizational efforts and resulting growth have also transformed its style, which Crocker believes will continue to bolster the company’s success. “Schaefer was a very risk-averse company [before]. We’re a bit bolder now, and we take more chances,” he says.