Preserving the Progress, Davico Manufacturing Sustains Lean Improvements

12% growth in 2009

By Karen Myhaver, Program Support Coordinator, MassMEP

Getting their higher volume products to market faster than the competition is just one of the many positive results Davico Manufacturing reported after introducing Lean concepts at their facility in New Bedford, Massachusetts. When interviewed in June 2008, the manufacturer of direct fit catalytic converters predicted continued growth, increased sales and the addition of employees. “We would not have been able to handle this type of growth without Lean,” shared Owner and President Ray Surprenant.

Davico was assisted in their Lean Implementation by the Massachusetts Manufacturing Extension Partnership’s (MassMEP) Lead Project Manager, Rick Bowie. Bowie began working with the company in 2003 and provided training in Lean methodologies to help identify and remove wastes from their processes.  The employees found the training very eye opening and continued to work on ways to change and improve what they do.

Lean techniques have helped Davico get orders processed and to the shop floor more efficiently. They helped them identify waste, to focus on value added procedures, to clean and organize their workplace and to maximize efficiency, productivity and safety.
As continued growth made moving to larger facility a necessity, a team of Davico’s shop floor managers worked with MassMEP’s Glenn Gertridge to develop a floor layout for the new building. By studying the relationships between processes and incorporating manufacturing cells into their work strategy they were able to have a well thought out design ready for their move in May of 2008. This made the event go very smoothly. 
It took a little time after the move for everyone to get used to the new facility, new layout and some new processes. Employees were cross trained so they could move back and forth between work stations as needed to avoid the build-up of work in process (WIP) in one location.

The flow of higher volume product has improved tremendously in the new plant and has made Davico much more competitive. It also allowed them to focus on the more complex, lower volume products which bring a greater profit.

On time delivery of special orders has increased to 95%.  Order entry time decreased by 80%. In general, productive time has increased and wasted time has decreased.

The fill rate on their most popular products has increased from 85% to 95%. Recently, Davico achieved 95%+ on-time delivery on these items after starting at just 50%.

They achieved this without expanding inventory and by working to eliminate work in process. The shorter through put means a higher rate of on-time delivery. There has been a transfer of raw material dollars to finished goods dollars due to the reduction of work in process and the utilization of Lean tools.

Quality has improved to a high 90% and is part of a continuous improvement process which includes smaller batches and quality at the source. The biggest contributing factor to the quality improvements has been process standardization.

Outages have been reduced to minimal and acceptable levels. Davico utilizes kanbans and other tools to prevent their running out of raw materials. Kanbans trigger finished goods as well as raw materials and are also used to indicate when re-ordering should take place.

Davico has been able to increase finished goods inventory by 30% and maintain their overall inventory number while reducing WIP and raw materials inventory.

They have seen approximately 12% growth this year and have added 10 new employees.

In their pre-move layout planning they included areas to accommodate future growth. As a result, space was allocated for additional welding stations and now, as the need arises, they have the room to add them.

The positive impacts that Davico is seeing can be attributed to the implementation of Lean tools and practices that have been ongoing for several years, and to the addition of Norm Sorel as Director of Operations.  Norm shares Ray’s enthusiasm and focus on continuous improvement and has an extensive background in Lean Manufacturing. “We really needed someone who can be focused on the production floor,” says Surprenant. “I can’t be that person since I have other areas of the business that also need my attention. Norm was a great addition to Davico and really keeps things on track.”

In a rather hostile manufacturing environment that continues to promote facility closings and employee layoffs, Davico Manufacturing saw a 12% growth in their business in 2009 and has hired additional employees as a result. Ray Suprenant says that Lean has played a large part in their success but emphasizes that Lean is not something you do for a while and then you are done. “You have to be committed to continuing to work on making improvements and sustaining what you have already achieved. It doesn’t happen overnight. You have to keep it going- that is the hardest part.” he adds.

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