Self Directed Teams: The Fastest Plating Company In The Mid-west
A Small Plating Company $3mm Sales Revenue
A small, dynamic family bought a plating business that did so well that in the first two years of existence it doubled in revenue. Top quality work and quick order turnaround resulted in a continuous flow of orders. The business was heavily leveraged as a result of the purchase of the business, and tight on cash, but the potential was great for future expansion.
The challenge facing the family was in determining how to position themselves for future growth. In conjunction with the Illinois Department of Commerce and Community Affairs, we assisted the firm in assessing its Rockford based operations. The objective was to assess the business for improvement opportunities, focusing on productivity, and to provide a direction for the company
Over a period of three to four weeks we analyzed the business which included a review of internal operations in the shop as well as in the office environment. We identified strengths, weaknesses, and opportunities for improvements in nearly all of the areas assessed: organizational resources, marketing, manufacturing, and information systems.
The firm's major marketing strengths were quick responsiveness and turnaround of customer orders, and consistent high quality plating. Both of these attributes provided a distinct competitive advantage.
One of the firm's major weaknesses was the informal management structure, not unexpected for a small company, family owned and operated. It wouldn't support growth.
One shortcoming was a general reluctance to delegate responsibility. Family members were overburdened, while employees were performing menial tasks. The organization was so deeply involved in daily operations, no one was planning for the future.
Another major weakness was inadequate production capacity, preventing the quick turnaround of orders while sustaining regular schedules. Capacity was used to satisfy major customers, while other business was declined.
Formalized production planning and scheduling was virtually non-existent. Order tracking was accomplished by walking the plant and identifying completed orders and hot orders. Information systems were primarily manual, cumbersome, and ineffective.
The facility was in need of repair, and required expansion for future growth. Material flow was poor causing mixing of inbound and outbound orders, ultimately resulting in missed customer ship dates.
We recommended that the organization be simply structured to maintain a competitive differentiation -- fast delivery, and high quality production. In addition:
- The company needed to delegate responsibility to others, freeing time for the family members to better manage the business. Production workers needed to be organized by teams, to assume full production responsibilities for the future.
- A formal education and training program was needed to prepare the company for the future.
- Capacity loading techniques were needed. Line capacities were needed to be sized quantitatively rather than intuitively to assist in scheduling orders through the shop.
- Order progress reporting was needed to close the loop, indicating when capacity is available on a particular line. A new broadly functional automated information system was required to support a larger future organization.
- A new facility plan was needed streamlining the material flow and providing capacity for future expansion. A small-lot line was needed to service large markets demanding Just-in-Time deliveries. An automatic plating line was needed to control movement of barrels and the electroplating process.
The
general prognosis for the business was favorable, and the company grew
quickly, doubling its size in two years. The company implemented our
recommendations, and realized significant gains in productivity
immediately. This company is now turning around high-quality plating
work in a fast-cycle time of 24-72 hours.