Growth Manufacturer Case Study
HiRel Systems-Lowering Inventory and Raising Customer Satisfaction
“Our future is more secure because of having this path towards improvement.” Kathleen Strevel, Plant Manager, HiRel Systems
Company Background:
Sixty years’ experience in power conversion and nearly a decade in custom magnetic work have made HiRel Systems a world leader in the design and manufacture of custom military power supplies and magnetic components for use in high-reliability applications in the medical, test and measurement, military, industrial, commercial, and avionics industries. This world-class manufacturer, headquartered in Minnesota, has factories in North America, the Dominican Republic and Asia. HiRel Systems’ manufacturing facility in Dover, New Hampshire where these improvement activities occurred employs approximately 100 individuals.
Situation:
Kathleen Strevel, HiRel’s Plant Manager in Dover, knew Christopher Tsakiris of the New Hampshire Manufacturing Extension Partnership through different events they had attended and manufacturing groups they belonged to. She had expressed frustration at the fact that their Lean Initiative seemed to have stalled and welcomed the opportunity to work with Christopher and the NH MEP to solidify their lean foundation so the company could begin to build again. “All of HiRel Systems’ facilities are at some stage of lean implementation,” says Strevel. “This is recognized and rewarded by corporate. In fact, the Vice President of Operations often comes from Minnesota to participate in the Continuous Improvement activities.” Kathleen also supports and participates in any events at the Dover plant and recognizes their importance.
Solution:
Grant funding for Supply Chain enhancement activities helped fund the training at HiRel which began with the Basic Lean for Job Shops. A group of twenty employees comprised of team leads, indirect support for operations, process engineers, supervisors, stock room and customer service employees and the New Product Group, participated. “Everyone loved it!” says Strevel. “They enjoyed the content and the way the training mixed hands-on simulation with lecture. Christopher (Tsakiris) is a very motivational trainer and keeps people’s attention- They learned and had fun!”
During the next event Tsakiris led an employee team through Value Stream Mapping one of their production processes from kitting to preparing parts to the production cell. They tracked the process and identified where waste was occurring and how it could be eliminated. As a follow up to the Value Stream Mapping they chose to do a Kaizen event on one of the production cells at the end of the process. They wanted to create a “point of use” replenishment system which would allow them to eliminate the need for frequent replenishment of inventory from the stockroom. Materials from kitting and parts preparation were coming to the cell in various quantities. Finished goods were being stocked according to customer forecast. Additionally, each new part required set up and staging time of approximately 90 minutes. This “Point of Use” Cell was analyzed to see what could be eliminated from the kitting and parts preparation steps and could be built right into the cell so inventory could be stored and materials could be kitted in the cell rather than brought in from various parts of the facility. It worked out wonderfully.
Results:
During the work HiRel hired a Continuous Improvement leader. On his second day in the Dover facility he conducted a continuous improvement event based on opportunities identified during the Value Stream Mapping effort. So far, the team has implemented a re-layout of the prep area and of the maintenance and tool and fixture areas as follow on Continuous Improvement activities. Now materials go directly to the point of use cell, saving a huge amount of previously-wasted time. “Implementing lean techniques in high mix/low volume operations is challenging,” cautions Strevel. “Labor can be consumed by non value added activities and by waste. Efficiency improvements keep our employees focused on production. That focus means the cost to HiRel’s clients is kept lower, enhancing HiRel’s competitiveness!”
Working with both their suppliers and their customers, HiRel was able to determine the ideal quantity of materials needed at a given time and to keep just enough in the cell to satisfy production at the pull of the client.
Measured Results:
- Reduced floor space by about 20% in the prep, kitting and point of use cell
- Lowered inventory to cell by about 25% by working with supplier and customer
- Increased efficiency allowed moving a person from the cell to an area where needed
- Set up and staging time were reduced by 75%
- Continuous Improvement Leader hired
- 100% of parts for the cell identified are now in Point of Use Storage
- Lead time to HiRel’s customers has been reduced by 5 days
- Product now travels through three production areas instead of seven
- Plans have been made for cellular development in other areas of facility
Testimonial:
“Keeping business in the US is challenging, particularly in low volume/high mix manufacturing. Implementing lean is difficult. This training helped focus us and gave us direction to continue moving forward. Momentum has grown. People are reenergized. Our future is more secure because of having this path towards improvement.” Kathleen Strevel, Plant Manager
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