Successful Implementations in Lean
Davico: Converting Successfully
By Karen Myhaver, Outreach Specialist, MassMEP
In May 2008, Davico, manufacturer of specialty exhaust systems, moved to their new 30,000 sq. ft. building on Brook Street in New Bedford, Massachusetts. This building is twice the size of their previous location. Ray Suprenant, Owner and President of the company, believes that they will double in size again during the next few years. Now they have the space to accommodate that growth.
Getting Higher Volume Items to Market Faster
In the new facility, product travels in one direction. This has improved the flow of higher volume products tremendously, so they are able to get to market faster than the competition. This new flow has also allowed Davico to devote more time and technical skill to the more complex or custom, lower volume products which bring larger profits. In fact, the reliability of special order deliveries has increased from 85% to 98% on time.
The new facility is efficient and well organized. Order entry time decreased 80% by changing the process and introducing Kanbans on the floor to trigger work orders on stock items rather than generate them through the office. Davico has also been able to increase the fill rate on their most popular 'A' part numbers, from approximately 85% to 95%, by manufacturing to inventory targets. In addition, by decreasing waste, the facility's productivity has increased.
Improvements Possible Because of Lean
Davico has been working with Massachusetts Manufacturing Extension Partnership's (MassMEP) project manager Rick Bowie since late 2003. Ray Suprenant first learned about the MassMEP while attending one of their public Lean events. He says Lean really struck him as being the right fit for what they needed. The Lean tools could help his company achieve the growth and success for which they had been positioning themselves.
MassMEP's Jim Gusha and Rick Bowie were able to provide assistance with the application process for both a Department of Employment and Training (DET) and Workforce Training Fund (WTF) grant which were awarded to the company and used to improve manufacturing operations by training employees in Lean manufacturing techniques like 5s, Kaizen, Value Stream Mapping , Workplace Organization, Set-Up Reduction, and TimeWise LE102 Basic Lean Principles for Job Shops.
Improved Efficiency and Productivity
Ray says his employees got a lot out of their Lean training and continue to do so. They now realize what waste really is and which processes add value that customers are willing to pay for.
"Learning about all the different ways we waste was really eye opening," Ray added. "Now we are constantly working on ways to change and improve what we do. When people enter our facility, they notice that is it clean and well organized. There is no clutter. The shop is safer and everything is in its place. This has had very positive effects on efficiency and productivity."
Lean techniques helped Davico get orders to the shop floor more efficiently. They have also been used to combine like procedures and decrease waste during the tube-bending process on the manufacturing floor. Leaning out their procedures has helped Davico stay cost competitive with much larger operations across the country. They have been able to increase capacity and decrease defects in a better and safer work environment for their employees.
Value of A Well Trained Workforce
Davico found themselves in need of a larger facility due to steady growth, the addition of more employees, and a second shift. They considered relocating to other towns – even to other states – but decided to stay in New Bedford, recognizing the value of being able to keep their well-trained workforce. The company was honored in 2005 with the Governor's Award for bringing new economic investment and jobs to New Bedford. So staying nearby and helping the local economy was certainly a factor in their decision.
New Layout Based on Relationships
Before anything was moved, Glenn Gertridge of the Mass MEP worked with a group of Davico shop floor managers to determine where everything would be located in the new facility. They took their time and went through every item and every procedure and studied the relationships between processes and machines to determine where things should be placed.
"During the process, we realized that we needed to change the manufacturing strategy from a traditional departmental operation and ended up creating three manufacturing cells for all of the production." says Gertridge. "When the time came to move, the group used the layout they had developed and the move went very quickly."
Since 2001, Sales Increase 10% Annually
Davico manufacturers well over a thousand different models of direct fit catalytic converters as replacements for original dealer parts. They are able to produce these at a fraction of the cost of the OEM products, and sell them only through distributors. Davico Manufacturing is a family owned business that has been operating in New Bedford, Massachusetts for over 20 years. They have 35 employees and anticipate doubling that in the next five years as they continue to grow and improve.
Ray Surprenant purchased the company from a relative in 2001. Since then, Davico has increases sales at a rate of about 10% annually.
"We would not have been able to handle this type of growth without Lean," says Ray. "Who knows where we would be without Lean tools? Bringing Rick and Glenn (MassMEP) in helped give a voice to Lean other than our own. They were instrumental in helping us get the employees on board. Due to our Lean work, we are building more efficiently in our high volume part numbers with higher inventory turns. As a company, we are getting more business and retaining and creating jobs!"