If your company isn't outsourcing at least some part of your operation, something's wrong, right? Not so, says Jeff Meehan, of R.T. London, formerly R.T. London-Norse. "If we can insource it, we will," says the general manager of the company's Washington division. "Our goal is to shrink the lead time and increase the throughput. The way to do that is by insourcing."
Insourcing is just one of several moves this manufacturer of casegoods and college residence hall furniture has made to make itself more efficient and infinitely more lean. As a whole, the company has also immersed itself in books and movies about lean thinking, it has worked to create an optimal batch size for throughput and it has begun to heavily invest in new machinery.
Previously, the company, which makes casegoods such as residence hall furniture for colleges and universities, mostly outsourced and assembled. When Meehan came to the company in 2003, he looked at products the company could make in house, then designed the process to accommodate that.
Meehan wants all employees to think like owners. In Lacey, there are 20 to 25 employees in a 72,000-square-foot building. An additional 30 to 35 work in the company's Grand Rapids, Mich., location.
"Everyone who works here is required to read Eliyahu Goldratt's The Goal (The Theory of Constraints)'" Meehan says. "Every February we rent the movie and have a refresher course. It's all about constraint management and increasing throughput."
When Meehan came to the company, he saw many areas that could be improved. The single biggest constraint was the supply chain for outsourced components and materials. The company brought in people with a fresh perspective, and sought suggestions. Some early suggestions from the shop floor were more of resistance to change than improvement.
Lead engineer Lynn Parsons says the company had to overcome people's attitudes, "It was difficult to get people to realize that the change was for the better," he says.
For a company that averages sales of $16 million annually, a few small changes have netted huge time and cost savings, says production manager Travis Lemmon, who looks at overall workflow. He says lead time has shrunk from 30 or 40 days down to 15 or 20 days since the summer of 2003, all with about half as many employees.
R.T. London also tries to set an optimal batch size. Meehan applied his experience in cabinets to try to do a batch that takes about two hours, so each half shift has at least one batch moving to a new work center. "I want to make sure we get two batches that move through a work center in a shift," he says.
"We try to engineer the batch size so it can go through the shop in 14 days, without adjusting the flow or moving things out of the way," he says. The Lacey, Wash., location is in an 85,000-square-foot building.
Saw boosts output
R.T. London had a record year in 2004 after bringing in a Giben Smart 75 panel saw that June. An older vertical panel saw achieved a yield of only 44 percent. The new Giben reached 80 percent with the same patterns, then after learning how to fully optimize, the yield jumped to about 95 percent.
Meehan and Parsons saw the Giben saw operating from an Excel spreadsheet at the TSI Seattle show. Parsons said, "You're not going to believe this. This guy says they can optimize from an Excel spreadsheet."
"If you're right, I'll buy one," Meehan replied. "But I need to see this in action, not a canned demonstration."
So Meehan and Parsons visited five cabinet shops in Salt Lake City that had Giben saws. "We came back and ordered one," Meehan says. "We were the first Giben in the Northwest.
"Using Excel data is so simple. You don't have to buy seats, updates or licensing. Anyone in the shop who has fundamental computer knowledge can run Excel."
"There was a lot of skepticism about buying the beam saw, but then we got it here and in a matter of two days we were buried in material," Parsons says. "The Giben beam saw reduced our cut time by close to two-thirds. The shop guys couldn't believe one saw did that. Once we got the beam saw, we had to change the arrangement of our shop floor so that material coming off the saw would flow right to where it needed to go."
Parsons says the addition of a Koch Sprint boring and dowel driving machine, which makes drawer box kits from Baltic birch, was another important part of an overall effort to upgrade manufacturing.
Previously, one person had to hammer dowels into machined parts. With the Sprint, R.T. London was saving half-an-hour of labor for every pallet of 500 stretchers. "If you can be shooting the dowels at the same time you're boring the holes, why wouldn't you?" Meehan asks.
Parsons says the Koch Sprint saves time primarily in setup. Engineering writes all the programs for the shop. It takes two or three minutes to write the program for the machine. The machine operator retrieves programs with a touch screen interface, and has a paper instruction that identifies the job and quantity.
R.T. London plans to use barcode scanning in the near future, so it would be able to do machining outside of a batch. Meehan would also like to get a second Koch (the Grand Rapids operation has two similar machines), possibly after a new edgebander is purchased. "If the right order came through, if someone came in and needed 1,000 wardrobes quickly, we might go ahead," he says. "Jobs pay for equipment."
R.T. London intends to update one key piece of equipment a year, and it must have a return on investment of 18 months or less. It typically achieves ROI in a forecasted 12 to 18 months.
A Holz-Her Unimaster 7226 CNC machining center was another important addition. Parsons says the technology on the machining center saves time in programming, setup and machining.
A Routech Record 130 CNC machining center is primarily used for nesting, and makes two-position chairs, cutting eight chair sides from a single sheet.
Other equipment includes an SCM Olimpic S212 edgebander with a Thomas return conveyor, SCM Compact 22 moulder, Whirlwind cutoff saw with TigerStop, Taylor clamp carrier, Voorwood shaper/sander and Butfering widebelt sander.
The Lacey plant produces 10 to 12 standard product lines, and assembles 500 to 600 units a day. R.T. London will be adding a second assembly line with a Ligmatech case clamp. The sanding department will be reorganized next year, but this is not seen as a constrained resource.
Most plywood comes pre-finished, but R.T. London also has three finishing stations, including two HVLP booths, and a flat line system that can be used for large batches. The company also has a small upholstery department that makes quality upholstered products and offers upholstery repair.
Distributor Continental Hardwoods provides a dimensioned hardwood restocking program and maintains applicable linear stock inventory. Previously, R.T. London was buying rough cut lumber, but Meehan says this proved to be too labor intensive and the yield was too low for the Lacey operation. Mt. Baker Plywood supplies most prefinished composite plywood, distributed through Hardwoods Specialty Products. These Mt. Baker Procore panels with MDF cross bands are used because Meehan says they finish better, without marks, and provide better uniformity in absorption into the veneer.
Meehan says R.T. London's strengths include its ability to partner with the customer and come up with a long-term solution. "It's not just about selling furniture," he says. "It's our service to the customer. We're offering customization in customer service."
He also wants to capture more "opportunity business." "We had a military job, and we weren't the lowest bidder, but we were the only one who said we could have it delivered and installed in six weeks from receipt of the purchase order.
"Our goal is to reduce time to market and increase throughput."
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