Carolina Cabinet executives see lean manufacturing and continuous improvement as paramount to their company's ability to compete.
North Carolina store fixture company embraced lean manufacturing earlier this year to cut costs and counter foreign competition, and its leaders are already enthusiastic about the results.
"It works, no doubt about it," says Tony Daniel, owner, president and CEO of Carolina Cabinet Co. The company, located in the small community of Black Creek, has been in business 30 years and claims some of the biggest names in retailing among its customers. Carolina Cabinet has annual sales of $12 million and has 115 employees working in nearly 200,000 square feet of shop and warehouse space.
Since January, when the managers of Carolina Cabinet chose its machining department as the first candidate for extensive study and subsequent realignment, overtime in that department has dropped 75 percent over the comparable period of 2004.
"We saw some great results," says Sales Manager Michael Jones. Carolina Cabinet tracked efficiency on one project before and after it implemented a lean manufacturing program. Before, 23 employees working in 20,000 square feet of space turned out an average of 12 units a week, Jones says. Since going lean, 18 employees working in 15,000 square feet turn out 25 units a week.
Other areas that have been subject to lean manufacturing audits and corrections include engineering, project management, shipping and warehousing. The purchasing department is in the midst of changeover, with drilling and doweling lines and the store fixture assembly area yet to come. "It will be ongoing," Jones promises.
Daniel, who was born 400 yards from present company headquarters, said his company turned to lean manufacturing after he became concerned that profits were losing ground while sales remained steady. "We've been trying to find a way to turn it around," he says.
Grant Helps Foot 'Lean' Bill
Carolina Cabinet secured a grant of $37,500 from a state economic development agency to help implement its lean program. North Carolina State University's Industrial Extension Service sent advisers to the shop, while Wilson Technical Community College contributed administrative training.
After Production Manager Gary Aycock and his machinery department team analyzed their daily work habits, it was determined that not only did their production processes need to be changed, but that the equipment also needed to be rearranged to improve workflow. Ultimately, hundreds of thousands of dollars worth of machinery was moved, and dust collection piping moved along with it.
"[Daniel] let them do what they thought was necessary," Jones say. "It was a leap of faith."
The Start of Something Big
Lean manufacturing is not the first trend Daniel has jumped on. During his service in the U.S. Navy between 1967 and 1971, he said he was exposed to the potential of computers. In those days, they were "house-size," he says.
In 1981, Carolina Cabinet was one of the first companies in Wilson County to invest in a personal computer, which it used for accounting. "As soon as we heard one was available, we bought it," Daniel says.
Nearly 25 years later, the company is heavily armed with computerized equipment, including three CNC machining centers for processing panels: a Busellato point-to-point machine from Delmac Machinery Group, a Biesse Rover and a Homag combination router and edgebander from Stiles Machinery. Carolina Cabinet also has two large rear-loading CNC panel saws, a Selco from Biesse America and a Giben, as well as a Schelling front-loading panel saw.
For the last several years, Daniel says he has thought about investing in a flat-line finishing system with a robotic sprayer. The problem, he says, is "we do such a multitude of colors and finishes, it would be counterproductive to set up a line to do it." When Carolina Cabinet does kitchen walls for a home-improvement retailer, "we use paint rollers and do it like you'd use for a house," Daniel says.
Carolina Cabinet's clients include Hanes Underwear, Merle Norman Cosmetics, and the retail divisions of several major furniture manufacturers, including Rooms To Go and Bassett. Lowe's Home Improvement Warehouse Stores, with more than 1,000 stores, also is a major client, though Carolina Cabinet no longer supplies the whole chain with store fixtures as it did in the 1980s when Lowe's had a fraction of the stores it has today.
Carolina Cabinet mainly crafts its store fixtures from solid woods, veneers, and high- and low-pressure laminates. It also integrates lighting and electrical wiring into many of its projects. Carolina Cabinet outsources metal parts and fixtures from a local metal fabricating company.
Sometimes when working with a large chain, a new product rollout can entail as many as 500 stores. Clients bring photographs and drawings of what they want to Carolina Cabinet. Before starting any big job, though, Daniel says he sends an engineer and project manager to an existing store in the chain to do reconnaissance.
"You can draw all you want to, but to understand the quality level of what the customer wants, you've got to see it with your eyes and touch it. You can feel quality when it comes to wood," Daniel says.
Carolina Cabinet started in 1975 when Daniel, who says he was out of work after stints in the Navy, teaching school and working for Firestone, agreed to wire a friend's hobby woodworking shop. Covered in sawdust, the two stopped at a country store for snacks and were spotted by a man who hired them to repair the seat on a swing. "You know, we could make a living at this," Daniel recalls saying to his friend.
"The next day, we ran our ad in the paper: 'Cabinet builders need work,'" he recalls. After being hired for their first job, Daniel says, "The next ad read 'Experienced cabinet builders.'"
The partnership eventually split, but Carolina Cabinet continued to prosper under Daniel. In 1980, Carolina Cabinet, then a five-man shop operating in a 5,000-square-foot facility, won a bid to supply the store fixtures at a Lowe's store in a nearby town. When the job was completed, Daniel was asked if he would be interested in supplying other Lowe's stores. Daniel says he assumed those to be the three he knew about. There were actually 200 stores involved in the project.
"If Lowe's had seen how few employees and how small a facility we had, they never would have given us the opportunity," he says. "They just asked us, 'Can you handle it?' My answer to that was 'Yes.'"
Daniel, 59, sees several trends emerging in the store fixture field. For example, he says more metal is being used in store fixtures like checkout counters because there is a greater emphasis on durability. "The emphasis now is on how to make them last longer in the store," he says.
Another trend, Daniel says, is an emphasis on price above all other considerations. There are very few clients who say, "This is what I want, no matter what it costs," he says.
"The Internet has made everybody an expert on price," Daniel adds. "It has caused our business to be extremely competitive." Store fixture buyers can shop over a wide area to find manufacturing sources, including those overseas.
Daniel, who wants to see Carolina Cabinet grow to $20 million in annual sales by 2008, decided to meet new competition head-on by taking a hard look at how his company does things, and then tightening up the processes to lower costs.
Not only has lean manufacturing cut production costs, Daniel says he also expects the resulting shorter delivery times to give the company an edge against foreign competition. While Carolina Cabinet can streamline its manufacturing, he says, "They [foreign competition] can't make their ships go any faster."
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