Stoughton Steel Enters New Markets and Raises Funds Through Crowdsourcing
"We have equipment and capacity and even though our competencies are in another market we knew we needed to look for new ideas for steel!" — Eric Lagsdin, VP of Operations
Andris and Eric Lagsdin of Stoughton Steel are sitting at a conference table in their facility in Hanover, Massachusetts. Not long ago the day-to-day pressures that are practically synonymous with running your own business, often kept them working seven days a week and prevented them from taking time to plan, to create, and just to step back and breathe.
Stoughton Steel’s Eric and Andris Lagsdin
Their parents, Andry and Dolores Lagsdin, started Stoughton Steel in 1974 to manufacture stabilizer Flip Pads®, a product invented and patented by Andry for use on the stabilizer feet of backhoes. The company moved to Hanover when they outgrew their Stoughton facility. Eric became Vice President of Operations and Andris, Vice President of Sales and Marketing. Their Flip Pad® product was in demand and they were busy designing and producing new variations to meet customer needs.
Lean & ISO Certification
Five years ago, an important client suggested Stoughton Steel obtain their ISO certification and do some Lean Manufacturing training. Soon the company began working with project manager Rick Bowie of the Massachusetts Manufacturing Extension Partnership (MassMEP) who brought in a resource to assist Stoughton Steel with their ISO preparation. Rick also facilitated employee training in Basic Lean tools, Value Stream Mapping, and Kaizen improvement to help manage their rapid growth. Stoughton Steel racked up the achievements: the ISO certification necessary to develop future business and continue work with current customers, a 10-15% productivity improvement for manufacturing, improved safety, improved morale, decreased down time, and 100% on-time delivery to Caterpillar, a major client.
In 2009, the business, which deals primarily with construction equipment, took a big hit from the economy. Sales decreased by one third. They tried to develop new products or search for new opportunities but couldn’t juggle this with regular production schedules and customer issues. Ideas were shelved for "someday when they had time."
The team attended CONEXPO, the largest international convention for the construction and construction materials industries, which open their eyes and got their creative juices flowing. Upon their return, senior management met in their conference to talk about transforming their company for growth with the new product ideas they gathered at CONEXPO. Eric warned that before they could successfully take on new ideas and products they their manufacturing process running smoothly again.
Kanban & 5S
"Sustaining improvements has always been tough," admits Eric, "but the inspiration we got at the show in Las Vegas was the incentive we needed to develop procedures to make the improvements stick!" He suggested they bringing Rick Bowie back to help rejuvenate their processes and develop procedures that would assist them in organizing their work space, making it more efficient and easier to sustain thus allowing them to innovate and explore new product opportunities. This became the foundation for the continuous improvement work that brought about an infusion of new life, new products, and a welcome change of pace for the Lagsdin’s.
Visual Kanban
"We did several 5S events to clean and organize before we began," explains Eric. Rick worked with employees to create visual systems and a game plan to help sustain their efforts. Visuals were imperative since not all thirty employees speak the same language. Color coding tools and areas of the shop according to team allows the shop floor to show when something is out of place or a team is not maintaining the standard. We have weekly group meetings to discuss what is going on and get employee ideas," adds Eric.
Visual Kanbans virtually eliminated the need for scheduling. Team leaders in each manufacturing area were empowered to handle their own material re-ordering. Standard quality training was also essential and has made ISO audits much easier.
"Hearing why we need to make the changes from an outside source, other than one of us, seems to have a lot more impact," added Eric. "Rick was able to talk to the employees without dictating and helped change the cultural mindset. He introduced the Pull Kanban process which the team adopted quickly." Everyone is also accountable for their own work and its quality, freeing up the supervisor to oversee production and makes his job easier and more enjoyable.
"The (Pull Kanban) project helps us sustain ISO with a formal manufacturing process as well as a system to support it," explains Eric. "Visual Kanban tags show when replenishment is needed and assists with better material control which reduces costs associated with excess inventory and other waste. Our employees really embraced the changes that have made their jobs easier!"
Results and New Opportunities
Decreased FlipPad® shipping time from 7 to 2.5 days.
Developed new product/market rubber edges for plow blades from same reinforced rubber as FlipPads® and stronger than standard edges.
Redesigned rubber cut for plow edges to be re-cut for FlipPads® as needed.
Brought work back in-house, purchased hydraulic presses to cut rubber in house. Cost savings paid for presses almost immediately.
Used powder coating equipment to take on small jobs during slow periods. Now coat 400-1000 units per week for one client.
"Primarily, we get ideas from talking to people," says Eric. "I walked around home improvement stores asking people who were looking at mailboxes what they would like to have for options then incorporated the ideas into my designs. Now we have a steel plate customizable mail box that can withstand an explosion!"
What is "Green" and Bakes Pizza? An Innovative Product from Stoughton Steel
Andris Lagsdin spent many years in culinary arts, working under renowned chef Todd English, before returning to focus on marketing, advertising and customer service for the family business. Until recently, his time was consumed addressing customer issues. Now they go months without any. Quality improvements mean happy customers and that means that Andris can devote critical time to investigating new markets, attracting new business, marketing their new products, and getting them ready
for sale.
With his culinary background and vast knowledge of steel, Andris recognized the advantages of the consistent heat produced by using steel plates for some types of cooking. In ModernistCuisine he read that by utilizing steel plates in a conventional oven you can recreate pizza oven baking at a fraction of the cost. Baking Steel® was his "ah-ha moment" and Stoughton Steel’s foray into the household consumer market.
"Baking Steel® is also perfect for the little restaurant that can’t afford a regular pizza oven," adds Andris. "We love the idea of using steel because it is one of the most recycled products on earth and are also having the one- of- a- kind covers for our Baking Steel ®made from recycled billboards!"
But…Will it Sell?
In August 2012, the Baking Steel® project previewed on Kickstarter®, an Internet funding platform, allowing the general public to learn about and make small investments in a new product to help fund ramp-up for manufacture. Within a month they had exceeded their funding goal by over 1000% and had received some media attention. A food blogger from New York tested Baking Steel® and reported "some of the finest crust ever made in his oven!"
Initial shipments of Baking Steel® are now being sent to eager Kickstarter® investors. Andris has completely redesigned the company website http://www.stoughtonsteel.com with a new look and feel to help promote their new products and hopes to attract a lot of direct on-line business.
Andry Lagsdin commented, "Working with the MassMEP helped Stoughton Steel stabilize cash flow which enabled my sons to grow the business, organize their efforts, and have some much needed free time to create!"
"Rick showed us the way to make our improvements stick and helped get the workforce, especially our management team, excited about the continuous improvement process. Everyone has seen the benefits. Now we can listen to new ideas and opportunities because we have freed up capacity by being so much more efficient and because we have made our crew responsible and accountable for quality. Ideas create ideas. Once you bring one to life you learn so much from the process you will be better prepared for the next one and it will take a smaller investment of your time and efforts to get it going." — Eric Lagsdin, VP of Operations
