Lean manufacturing has been a "godsend" for Leisters Furniture in Hanover, Pa.
"If we'd continued to do things as we always did, I honestly don't think we would have made it," says Tom Leister, president. "We freed up a tremendous amount of cash that we needed at a time when business was very tough."
Five years ago Leisters employed 85 people and did $10 million in sales. With the increased import market, the company faced a real risk of shutting down. Now, using lean manufacturing, the company is admittedly smaller with 45 employees and $5 million in sales, but it's also more profitable.
"It's allowed us to get smaller and yet I think we're doing a far better job of managing the business today than when we were larger," says Leister.
When the market changed in the early 1980s, with pine and early American style fading, the company shifted to making smaller occasional tables. And when the market saw an influx of cheaper imports, the company looked to lean manufacturing to tighten up its processes and stay competitive.
Implementing lean manufacturing has allowed the company to look to expand its niche and move into semi-customization. "We've really had to look at what it is we have to offer, because we can't compete with the imports on price," says Leister. The company is focusing on quicker delivery, good customer service and providing flexibility and choices to not only remain competitive, but to grow.
The path to lean
Leister started to learn about lean by reading "The Goal" by Eliyahu M. Goldratt and he's read it twice. "Every time I read it I learn something new," he says. "The first time I read it, there were things I didn't understand. When I read it the second time, after we had been through some more things, I understood more."
Leister also went to a three-day seminar on lean manufacturing at Virginia Tech and visited other companies that had implemented lean. He also hired Art Raymond as a consultant to evaluate the manufacturing process in the plant. Leister says Raymond liked the one-piece flow that he saw in the assembly and finishing areas, but felt the inventory and raw material processing needed attention.
Before bringing lean in, the company produced a lot of inventory, primarily to keep employees busy. "Now we're not running inventory to just keep people busy. We're only running parts that we need," says Leister. "The faster we can replenish inventory, the less inventory I have to have."
Inventory is now carefully monitored. Items that need to be replaced immediately are flagged with a red note. A yellow note will be put on a part where replacement is not as critical, but needs to be put in the mix soon.
"If you're concentrating on producing inventory, you're spending time on product you don't need, and the product you do need is sitting there," says Leister.
The company really didn't change the way it made parts, just how many it made and how the employees operated. When the company started looking at its operations, it realized that it needed to reduce waiting. "Parts go from one station to the next and sit there because there's so much in the queue, so much waiting in there, so much stock," says Leister.
"The first thing we did was decide that we were not going to cut anything that we didn't need," he says. With that, lumber usage went down.
"You start to recognize that some of the things that you were doing were somewhat wasteful and counterproductive, tied up a lot of your capital," he says. "We were able to cut our inventory in half over about a three-year period, little by little, as we kept fine-tuning and finding other opportunities."
When the company focused on cutting only what it needed, the question became what to do with the ripsaw operator. The answer was cross training. "If we didn't have 40 hours of work cutting off, maybe we had 30 hours. Then that person would come down and do the bandsawing."
That was the beginning. When the beginning processes were changed, the work-in-process inventory dropped. Everything started to move quicker because there wasn't so much material waiting.
Although the company has reduced the number of employees, the reductions were not due to lean, but the change in business conditions. Employees are more valuable because they can do more and, if they understand the process, they can provide more useful input, says Leister. Employee participation is important in the lean process.
"Lean is a continuous improvement. You're always looking for things to improve," he says. "You see the big and obvious changes in the first year or so. After that it starts to get a little harder because you've taken care of all the obvious things."
It affects every decision you make," says Leister. One of the things the company did was change the way it purchases supplies. It used to look at it strictly for the cost savings volume purchasing offered, he says. But then he started looking at the real costs associated with buying six months worth of supplies, like the cost of space for storage.
"I'm better off to bring in a two-month supply so I don't tie up so much of our capital, so much of our space, so much labor just moving stuff around because it's in your path," he says. And with less inventory, the company has been able to produce product much faster.
An important part of lean is making everything as visual as possible. The plant works off shop orders or instruction for each part. When product goes from one machine to another, the shop order goes with it. There is also a scheduling board where the information is listed.
"Anybody can walk up and you can see what's sitting at that machine, and that helps us to schedule and to keep track of things," says Leister. "Just by walking around you can pretty well see if there's a bottleneck developing or there's a lot of material behind or just where you are."
The backbone of the mill is still the big machines the Weinig moulder, the Fletcher double-end tenoner, the Diehl ripsaw, Timesaver widebelt sander, Dodd dovetailer, Taylor glue wheel, the Thermwood CNC router and Rhodes finishing system. A lot of money was spent in the late '90s to buy equipment.
Now the focus is on smaller pieces of equipment that can be used in cells. "They've been more geared to do a specific job or two in a cell arrangement," says Leister. In the last couple of years the company began grouping machines to make processes more efficient.
Although Leisters tracks efficiencies throughout the plant, including jobs, labor, quality and production, it isn't being done by computer. "We have to do an awful lot in our heads. You have to catch it and physically see things," Leister says. "We're not getting the help from a computer system that maybe would do that for us. You can make mistakes that way."
Leisters Furniture is in the process of putting in a new computer system that will provide it with a lot more manufacturing information. "I'd like to be in a position to have more information that would allow us to do a better job of managing the business. And by having that information in-house I could improve quality and production," says Leister.
As far as looking to the future, the company is working to be more aggressive in giving people what they want. But the company isn't starting from scratch with the products it offers. It may use a top from a cocktail table with legs from an end table. New stains and colors are being offered to customers, as well as a variety of decorative hardware options, to provide customers with more choices.
"We've tried to focus on flexibility and choices and also semi-customization," says Leister. "We're modifying items that are in our line. In some cases we're making whole pieces if we have the parts."
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