Growth Manufacturers Case Study
EY Technologies Takes Continuous Improvement to New Level…Above the Shop Floor
By Karen Myhaver, Project Support Coordinator, MassMEP
"I highly recommend the Lean tools and Kaizen methodology to solve front office issues. We had these problems and needed to think of ways to address them. We knew we had the integrity to do it and make it stick. And yes, we ruffled some feathers. There was a lot of tribal knowledge and certain cultural roadblocks because we had to take people out of their comfort zone. Change is difficult but employees quickly recognized the need and benefits. This work has taken so much pressure off Finance, Sales and Customer Service, making their jobs easier and more enjoyable."
-- Manny Jerome, COO, EY Technologies
EY Technologies designs and manufactures technical and specially coated yarns used in the telecommunications, aerospace, military, wearable electronics, electrical, transportation, heavy duty construction, mining, and agricultural industries. For the past three years, the company has partnered with MassMEP and project manager Rick Bowie in their continuous improvement efforts. After seeing great success on the shop floor, Manny Jerome, EY's COO, thought it would be interesting to apply those concepts to their office processes in an attempt to improve and streamline order processing, finance, and sales methods.
"You really can't implement Lean on the manufacturing floor and forget about all the things that go on beforehand, all the pre production elements that play a big role in meeting production goals and satisfying customers." said Jerome. He called upon Bowie to assist them with this new challenge.
Too Long to Close Month End Financials
The Financial Office oversees the flow of money in and out of the business. Understandably, people in finance like to be very hands-on so they can keep a close eye on the money. Often the procedures they initiate to do this create roadblocks in other areas of the business. This was the case at EY. Procedures had not been changed for many years and the company's culture dictated that "this is the way it has always been done."
Until the start of 2013 it took the Financial Office about two weeks every month to close month end. There were always many reasons and different influences as to why this was happening. The financial group believed the amount of time they were taking was necessary and out of their control. Month after month they performed the same cumbersome actions to gather data for reports that were produced after their real usefulness had passed.
Customer Order Process Created Delays
Sales and Customer Service procedures were also infused with so many inefficiencies that taking a simple customer order and getting it to the manufacturing floor for production took five or six days. Of course, hold ups have a ripple effect, which meant delays in production and delivery, as well. There were other contributing factors with the paperwork and "turf wars" due to the company culture. Procedures needed to be organized and brought under control so that orders reached production in a reasonable time.
"We did a Financial Kaizen with Rick Bowie as facilitator, and for some of the more intense moments, a bit of a referee." says Jerome.
They assembled an employee team including the finance manager, purchasing and scheduling people, finance assistant, and the operations manager. A value stream map diagrammed how the process was currently being done. It made many things visible and obvious so that participants were constantly asking, "Why do you do this or why can't you do that? "This allowed the team to hash out all the factors and problems that contributed to the hold-ups and address these with the individuals who controlled those actions.
Typically, kaizen events take a few days but this group was ready to move forward after just one with their list of target issues and potential solutions for each. The team did a report to Jerome on their findings, recommendations, and the anticipated outcome. They also presented him with a list of items that he was responsible for. This included advising others of when specific reports were needed and encouraging everyone's support of Finance in this effort, since the outcomes would be beneficial to all. The estimated goal with improvements in place was that month end closings could be completed in 3 days rather than two weeks.
Today, when you speak with Sales and Customer Service, order processing is entirely different from what it going two years ago. This has allowed EY to be more responsive to their customers and meet their needs faster. Now, a typical order hits the production floor in 24 to 48 hours of being received. This significant decrease in pre-production has also improved production time and enhanced delivery. Similar improvement activities were facilitated throughout all EY Technologies offices.
"It's like night and day and nobody wants to go back to the old way," says Jerome. "The first month end close after the Financial Kaizen was completed in just two days! We have remained on track at two to three days ever since. It makes a huge difference for me to be able to see all the numbers early on in the month. How helpful is that information to me half way through the next month?"
Now Jerome has the information to run his business when he needs it. He says, "Things are running like clockwork." Employees realize that the changes have made their jobs easier, so sustaining them is no problem. Rick Bowie adds that the improvements will also help EY position themselves with their current and future customer base as an easy and a great company to do business with.
EY Technologies's latest continuous improvement efforts have produced:
- 50% reduction in time for orders to reach production floor
- Faster production time and delivery
- Enhanced customer satisfaction
- 80% reduction in month end reporting from two weeks to two days
- Improved ability to make business decisions
EY Technologies, of Fall River, Massachusetts, designs and manufactures technical and specially coated yarns used in the telecommunications, aerospace, military, wearable electronics, electrical, transportation, heavy duty construction, mining, and agricultural industries. Their Massachusetts facility has fifty-four employees and houses their corporate headquarters, laboratory, and manufacturing facilities. The company also has sales offices in Europe, South America, and Asia, with distribution facilities in Europe and Asia.