ELKHART — When the Greater Elkhart Chamber of Commerce first conceived doing a day-long conference on lean operations, organizers figured it would draw maybe 30 people.
It's natural for companies to resist change, especially ones that are profitable.
So chamber president and CEO Kyle Hannon was pleased when approximately 185 people from all types of businesses, representing a broad spectrum of lean concepts knowledge, came to the event at Elkhart General Hospital on Thursday, March 27. "Lean operations" is a sect of operations management that focuses on saving money in a variety of different ways -- by cutting costs or increasing efficiency or profits, for example.
Still, it makes sense that there's more interest in gaining efficiency when companies are busy, as is increasingly the case in the Elkhart area.
"That's when waste starts noticeably piling up," Hannon said. "Because of the speed at which companies are now moving, it can kind of magnify where problems might be."
Keynote speaker Steve Brenneman, president and founder of Nappanee-based Aluminum Trailer Company, told of how his former company, Nappanee Window, failed to survive the Great Recession of 2008-2009.
"We had great people. We had an incredible culture. We had a great product," Brenneman said. "But we didn't pay attention to the process and we didn't go through the rigor it takes to work through process improvement."
While there are a lot of buzz words in lean operations, it's really just the scientific method, Brenneman said.
"It takes time and a method to plan what you're going to do, to take action and experiment, check results and then act on those results. That's what it is, really simple," he explained.
As someone who hates waiting in line, Brenneman said he was impressed with a Winona Lake coffee shop that rounded all prices to the nearest dollar and paid customers' sales tax for them while asking customers to "pitch pennies" that would help in that regard.
"[The owner] said 'you wouldn't believe how much time that saves me when I go down to the bank.' I'm not counting out pennies and dimes. Does the customer really care about the 22 cents he's going to get back in change? No, just charge me the whole dollar. Is there a customer value in charging $1.67 for a bagel? No, just charge $2, who cares?"
Aluminum Trailer Corp. went through a "very scary" time during 2009, when sales had dropped to $10 million from $26 million during 2006. The company cleaned up work areas, got rid of unneeded tools and materials, consolidated work areas to eliminate 40,000 square feet of space no longer being used and redesigned the work flow.
Line workers were only given enough parts for four hours of work, with a parts person replenishing their parts every four hours.
"We talk a lot about staging materials, so that a person working on the trailer can stay right where they're at and finish completely. That takes a lot of work in the back, but then the people creating that value can stay focused on creating that value."
Marc Rose, continuous improvement manager at Nibco Inc., an Elkhart-based maker of plumbing fixtures, said a lean overhaul he led there achieved major savings.
"Whatever product you make or sell, somebody else is out there trying to make it better, faster," Rose said.
The changes reduced lead time — the time between receiving the order and receiving payment for it — by almost 60 hours, which improved cash flow. Under the old process, it took 95 hours to produce a pallet of finished goods. After the lean changes, that time was reduced to 36 hours. The company saved $45 million across its 11 facilities nationwide, from 2005 to 2013, and this year is on track to save about $7 million, Rose said.