Growth Manufacturers Case Study
More than Following in Dad's Footsteps: Growing & Transforming into a Next Generation Manufacturer
Peerless Precision, Inc. (PPI) is a small, 20 person, family-owned job shop that specializes in the manufacture of precision machined parts for the aerospace, defense, and medical devices industries. Their area of expertise is when tolerances of .0001" or better are required and have delivered 1 helium light band in flatness, .000005" in roundness, and .003" wall thickness. Peerless Precision is certified under both AS9100:2009 and ISO 9001:2008.
Larry Maier purchased the company in 1997. Kristin Maier Carlson became president in 2012 when her father became ill, and has since guided the company through their next growth stage.
As the new president, daughter of the past president, and someone who had worked in the company on and off since she was 15, Kristin had to rise from being viewed as "Larry's daughter" to being the visionary leader of the company's future.
After having been away for a few years and to best understand the organization, Kristin had a transition period where she relearned the company. She knew that she needed to ease everyone's fears of her selling, so her first mission as the president was to reinforce with the employees that she was there to grow the corporation and to be there for the future. She continually reinforced with the employees that she wanted them to build the company together. Layoffs and selling what her father had worked so hard to build was not an option for the future.
The talented Peerless Precision management team and its employees have helped it succeed and grow. The company is a key supplier for Tier 1 aerospace and defense manufacturers. As part of Kristin's growth and strategic plan, she wanted the company to become more progressive in its product line, markets, and overall efficiency. The company also needed to increase sales as they had recently dropped off due to sequestration.
Increasing Revenue, Implementing Lean
In early 2014, building off an 8-week "The Stronger Business Program" completed at Springfield Technical Community College (STCC), Kristin developed a vision for the company's future growth that included a strategic plan to increase revenue and a continuous improvement process using Lean principles.
Kristin had heard a lot about Lean and toured other companies in Western Massachusetts to see best practices that had been implemented. She knew that in order for the company to sustain any growth potential, they needed to become more efficient on the shop floor. Kristin's initial goals were to improve the flow of the work, become more organized, and implement visual management techniques. While conducting her research on Lean practitioners, she kept hearing over and over that she needed to speak with MassMEP, so she contacted Susan Janus, Regional Manager for Western Massachusetts.
At the time the company was undergoing a Lean transformation, Kristin began her transformation into the President's role. One of Kristin's mentors had given her valuable advice, "watch the books – watch the guys." In watching the books she started to manage by the numbers and implemented management controls to help the company become more efficient, which complemented the training provided by MassMEP. As for watching the guys, her goal was to create an environment where everyone's voice is heard and their expertise is leveraged. There was a management shift at the company, a senior management team was developed and teams were formed on the shop floor. Everyone began having input into the direction and growth of the company.
In October 2014, every person at the company, including Kristin, participated in the Principles of Lean training. This training provided a common language for the company to work together towards becoming more efficient and opening the lines of communication.This helped bridge some of potential barriers between management and the employees on the shop floor. They began moving away from, "We have always done it that way" and moving towards working together to grow and change the company. The future direction of the company was being formed.
Increasing Flow and Improving Productivity
After the Principles of Lean (Lean 101) training, MassMEP conducted a Value Stream Mapping (VSM) workshop for the fabrication a key product for a critical customer. After clearly mapping out the current state, the VSM team members outlined key actions required to implement a future state vision that would increased flow and overall productivity. Their action plan included implementation of Pull / Kanban systems, continued implementation of Visual Systems, changes to lot size and machining location, additional machine programming, review of inspection requirements, and plans for future cross training. MassMEP provided them with the tools to implement these new practices. Now they are working together to expand the initial implementation of these best practices for other products and processes. As a result of these changes, production has significantly increased – everyone benefits as they are working smarter, not harder.
Creating Corporate Vision
To assist Kristin with developing a Strategic Growth plan, Peter Russo, MassMEP, Growth and Innovation Program Manager, provided consulting services focused on sales, operational goals and enhancements, management by numbers, leveraging capabilities, resources, and connections in the marketplace, and creating a company positioning statement (Why, How, What) for improved sales and marketing.
"Peerless Precision Inc. believes that you should design your products within 5 millionths without having to worry about manufacturability, consistency and accuracy; just send us the specs – we take care of the rest."
To help plan for future growth and identify new markets, Susan Janus, MassMEP Regional Manager, leveraged a grant to provide Kristin and her team with a Technology-Driven Market Intelligence (TDMI) research project. TDMI identifies the benefits and market impacts related to a company's technology-based asset (e.g. idea, product, process, capability) and provides customized actionable intelligence needed for the company to expand.
Kristin commented that one of the components of the TDMI process is to define precision. She learned that precision is more than keeping tolerance, but rather doing it consistently over time. That is the value she brings to her clients: fully understanding the value of her company's services and providing a clearer direction for the future of her company and the value-add it can bring to its customers.
As a result of the TDMI, they realized they were able to assist in engineering the prints rather than just work from prints that were provided. This saves Peerless Precision and their client's time in rework and developing the prints, quicker completion of the job.
The Management team has expanded their vision to looking beyond a sheet of paper and now evaluates the full process and value they can provide to a client. They have found a niche market of delivery by working together and understanding the future direction of the company.
Kristin's father, Larry Maier, has always been admired and remembered for his relentless support of manufacturing, from dynamic activity with vocational technical schools to advocacy for the Western MA Tooling and Machining Association. Larry would be proud to know that his daughter continues in both these areas while dramatically transforming and growing the family business into a next generation manufacturer.
Areas of impact
- Culture: Company growth through change. No longer "That is how we always did things." Implemented Management team on the shop-floor.
- Jobs: Added 3 new full-time employees, plus co-op students.
- Sales: Increased by $700,000 in one year.
- New Markets: Mega trends identified — medical devices, commercial aerospace, unmanned vehicles, robotics, energy, and sensors.
- Other: Installed scheduling system. Increased on-time delivery by 10%.
"MassMEP helped me to determine the best direction for the company, connections to outside sources, such as Greentown Labs, so that we can grow and be here for future generations." - Kristin Maier Carlson