Kolbe & Kolbe Millwork Co. Inc., Wausau, Wis., is reporting record sales in the midst of a construction downturn. Its high-end custom windows and doors combined with expanded wood and vinyl offerings have created a recession-proof niche.

The company's strategic positioning is paying off. In 2006 the manufacturer reported record sales, and according to Mike Salsieder, president of Kolbe & Kolbe, 2007 sales are on a similar pace.

"Three years ago we set a course to position ourselves as a high-end window and door manufacturer by focusing on architects and custom builders in the commercial and residential markets," Salsieder says. "These markets are resilient even in a downturn because people continue to purchase high-end homes."

According to Salsieder, remodeling is a steady business. If new housing construction is down, remodeling is usually up. "To increase sales, we expanded our wood and vinyl offerings to include green products, which save energy. Additionally, traditional-looking windows have been redesigned to withstand high-level air and water pressure," says Jeff De Lonay, Kolbe & Kolbe's vice president of manufacturing.

Removing waste

The manufacturer wanted to incorporate lean principles into its manufacturing operations, and hired a lean consultant to create a company-wide continuous improvement program to remove waste and replace it with value-added activity.

Employee improvement teams were created to improve product, processes and performance issues. Each team is comprised of five people who use fact-based problem-solving tools to generate sustainable results. All improvement teams are strategically developed so one event builds on another, comments Salsieder.

Continuous improvement also is harnessing a company's most important resource its employees. "During this process, we've tapped into undiscovered employee talent," De Lonay says. "We've promoted several employees to supervisory positions based on the work they've done in these lean events."

To root out waste and calculate future production levels, the manufacturer drafts a value stream map for each product line. "If casement windows are forecast to increase 5 to 15 percent, we can make changes early in the cycle to make sure the capacity is there when we need it," De Lonay says.

Kolbe has concentrated heavily on streamlining its doors and double-hung window production lines. "Before continuous improvement we didn't move equipment around in our main facility," De Lonay says. "Now, equipment is moved into different cells on a daily basis."

Big product line changes haven't required large capital expenditures. "We can produce more using the same labor," says Salsieder. "After 2-1/2 years of continuous improvement we're starting to reap the benefits of increased efficiency and shorter lead times."

"As you get into the process you want to move faster and faster as you see the potential. The challenge is to balance patience with a sense of urgency to follow up."

While lean manufacturing has its roots in the automotive industry, many of its principles are applicable to a custom manufacturing process, comments Salsieder. "We have the challenge of producing a custom product with a short lead time," he says.

Penetrating markets

Even though Kolbe's outlook for the construction industry isn't as optimistic as some are forecasting, Salsieder sees plenty of opportunity.

"We believe the construction downturn will last until mid 2008 and residential construction will recover in mid 2008 to 2009," he says. "Because people are investing in high-end windows, we continue to penetrate markets with buyers." The company has had significant growth in the Southeast, West, the Mountain states and Texas.

"Even though there's a black cloud over the construction industry, because of our market position and lean initiatives we have yet to feel any effects of the downturn," says Salsieder.