Leading the way to lean thermoforming

How can a thermoformer expect to thrive if he doesn’t adapt his business so that ‘lean’ concepts drive his decision process? The answer from McClarin Plastics: he cannot.“We embarked on our lean journey by need,” recalls Jeff Geiman, VP operations, who manages the program at the processor of thermoformed and GRP composite parts. In the late 1990s, competitors had eaten into the Hanover, PA-based company’s truck bed thermoforming business, he recalls, so that “it became hard to make a return” on what once was a proprietary product in a profitable niche. At the same time the economy started to head south (“much like today”), so the company exited the bed liner business. Challenges were plentiful and significant, and McClarin owner Todd Kennedy asked Geiman then to move from his sales position to production to see what could be done to get lean.The firm had started some lean manufacturing steps in the 1990s, but with Kennedy’s mandate “we then got officially lean,” Geiman says. As most processors know by now, lean concepts involve taking a business apart into manageable chunks and then devising ways to improve those chunks. As covered in past MPW articles and reiterated by Geiman, the greatest difficulty is in changing the ways of creatures of habit—a processor’s employees.  To learn more, quickly, Geiman joined a local group, the Hanover-area Lean Forum, in which he heard of best practices at other companies in the area that had already started their own lean transitions. “We (at McClarin) started with the low-hanging fruit,” he says, looking at ways to reduce inventory and improve machine operational rates. “Basically better scheduling” and learning how to let customer demand drive production, rather than simply forming parts and hoping they would sell, was enough to earn the firm some quick, positive results. “We were doing more project changes so we added manpower to machine set-ups. Instead of focusing on labor costs, we instead focused on machine uptime to make good, saleable parts,” he says, noting it can be a big transition for managers, used to preaching lower labor costs, as they watch that line item rise. But, he says, managers need to remember that keeping a lid on labor cost is not their job; it is to produce quality, saleable parts—as many as necessary, but no more.  One of the first steps Geiman took was to promote the 5S method for organizing a workplace and keeping it organized; he credits 5S with convincing the company’s employees and leaders that lean manufacturing was the right choice. “That’s when our lean culture took hold and we started to see positive results,” he recalls. “We drove inventory down, increased cash flow, increased sales.” (Ed. Note: Essentially 5S involves deciding what you need, where you need it, how it should be stored and when to reorder.)Phase two begins“It’s taken three to four years to really get a lean culture. We spent a lot of time developing that culture,” Geiman says. The results have been very positive. Better use of its available space enabled the firm to increase its square footage since then by just 25%, while in the same period tripling its sales volume. It also has cut its energy use by leveling production activity to customer demand, reducing the number of spikes in energy demand, and also has managed machinery starts and stops around non-energy spike times. “Now, we do tons of subassembly too; we’re not just a plastics processor. We offer design assistance too,” he says, and actively market these to customers and prospective clients.With the culture firmly established, and manufacturing very ‘lean’, he says the processor is in the second phase of its lean evolution, in which it works to align its marketing and sales strategy to take advantage of the new opportunities created by, for example, the more efficient manufacturing. This phase also involved getting lean thinking into the firm’s office environment. “I think lean often fails because it’s harder for your administrative people,” he says, referring to managers, purchasers, assistants, and all non-production employees. “They need to be on their toes all the time in a lean environment,” he says, noting most people want to work hard and think they work very hard, but usually have reserves they cannot tap until given the appropriate help. Employees can make the transition, he says, but management also needs to be forgiving of mistakes made; creating an atmosphere of fear or retribution only causes human instinct to kick in and employees to create a safety buffer, such as extra stock. This natural reaction may keep them from being yelled at, because a specific item is always in stock, but also could unnecessarily tie up company assets.Customers, suppliers and you, in the same boatThis year McClarin became the first in its home state to hold a cooperative lean certification session. The session, conducted by Mantec, an industrial resource center for small-to-mid-sized manufacturers in PA, was to help its employees, as well as those from its customers and suppliers, work better together in recognition that ‘a rising tide lifts all ships’. Geiman calls the move “truly a change of culture” as customers and suppliers open up to each other, recognize that all of them need to earn a decent profit, and then work separately-but-together to improve. The session included 16.5 full workdays of training, which the processors spread over a half-year period. McClarin offered use of its facility and filled 22 of the 40 slots. Employees from throughout the company were selected by management to attend to become “lean leaders”. Although its customer and supply base is international, for this first training session the firm stayed local, inviting employees from three local customers and a handful of local suppliers of parts for the sub-assemblies that McClarin purchases. The class included classroom training, ‘train and do’ sessions and then visits to other companies, including some of those suppliers and customers. He says this proved especially valuable as employees from various companies were mixed in small groups. McClarin purposely chose a few problem areas for the groups to visit, and has benefitted from the ideas sounded by the non-McClarin employees, who saw the business through new eyes.  Geiman adds that processors need to go thick on leadership to implement lean. “I hear the same thing all the time at other companies where lean didn’t take hold. It takes leadership to say, ‘I’m not going to accept any less,’” he says. Leadership is critical, he says, to ensure all employees recognize that changing their behavior to a ‘lean’ one is for the good of the firm, which trickles down to the good of all of the employees. He notes that McClarin’s Kennedy is a constant presence throughout the company, encouraging and educating employees. McClarin, he says, spent a lot of time with its employees to develop the appropriate measurements/goals for its workforce. “A lean environment will never take hold unless you can measure your results,” he explains.“We were ferocious in our approach,” Geiman says. “I really feel sorry when I go into places where they say they tried but it wouldn’t work; it just shows a total lack of leadership.” He agrees that it is difficult to change a company’s culture, but the benefits are worth it as a company transforms itself to almost “become indispensable” as a supplier, he says, by ensuring its quality is extremely high, its competence is great and its dependability is unquestioned. One critical ingredient is also to stay on top of costs, he notes. Foreign or lower-cost competition always is present, he says, but adds, “If you do it [become indispensable] in a way in which you’re on top of your costs, then you should be fine.”