Client Success: US Button
Putnam
72 employees
COMPANY PROFILE
Now known as US Button / Emsig Manufacturing, the original
company produced genuine mother-of-pearl buttons and dates back to
the early years of the twentieth century. Today, US Button uses
plastic melamine with compression molding technology to produce
plastic buttons. Emsig Manufacturing has owned the company since
1995. Seventy-two employees produce buttons for the military,
uniform and sportswear markets in a 90,000 square foot plant
located in Putnam, CT.
SITUATION ONE
Just before the events of September 11, 2001 rocked
the rest of the world, a new Chief Operating Officer and his staff
of dedicated employees, began to rock US Button's world. When Burt
Elliott took over the operations of the company in August 2001, he
realized that the only way for the company to succeed was to
implement many difficult changes, both in process and in
culture.
Production and scheduling were causing a backlog, resulting in over 1,000 lots of Work In Process (WIP). On time deliveries were 64%, with 6-8 week customer deliveries. The industry standard is 3-4 weeks. Burt spent most of his time fighting fires - answering calls from disgruntled customers, and then changing the work schedule. Most of the 165 employees, on all three shifts, were working costly overtime, just to meet the already late customer orders.
Operator and mold productivity in the mold room was less than 70%. The deteriorating mold cavities were creating press inefficiencies and inline problems for the operators. Press operators were frustrated with material sticking, and lots taking 30% longer to mold. These problems created inefficient production and operator stress.
Quality was jeopardized and compounded wastefulness. Overstaffed departments produced 3.78% scrap that needed to be sorted by 22 inspectors. Employee morale was down, resistance to change was high and absenteeism was rampant. Absenteeism in 2006 was over 3% of scheduled hours which added to costly overtime and gave rise to an uneven work flow.
Nine months into his first year, Burt knew he needed outside help. CONNSTEP's consultants, having contacted him previously, came to meet with him to review all the processes. They saw the same potential that Burt saw in this age-old operation - launching a valuable business partnership.
SOLUTION
CONNSTEP consultants introduced US Button to Lean
by value stream mapping the operation. Burt and his team quickly
learned the usefulness of data in qualifying and quantifying
operational problems to determine the right solutions. CONNSTEP
consultants guided Burt and his staff through the process of
establishing metrics and a monitoring system for each department.
They set annual goals with targets measured weekly. Departmental
goals were posted for all employees to follow.
The company also replaced all of the defective cavities with newer products made of more durable steel. This was an expensive and time consuming solution which took one year to complete, but when finished, it brought immediate results. Once the mold improvements were completed, management worked with the union to develop a press operator incentive program. Together, they rolled out a plan for operators to earn up to an additional .90 per hour to their base rate.
At the same time, CONNSTEP introduced US Button to the kanban system and showed the company how it could reduce and manage its WIP. The company identified 45 SKU's which represented 85% of the sales volume, set stock levels for these items and scheduled timely replacement.
Employee resistance to the Lean journey was strong even with the union's cooperation. One high ranking salaried employee, speaking on behalf of all the employees, challenged many of CONNSTEP's recommendations. CONNSTEP handled each challenge professionally, with the right approach and the right answers, building trust and confidence. This same high ranking employee went on to successfully complete CONNSTEP's first Continuous Improvement Champion Certification (CICC) program and is now one of the biggest Lean champions within the company.
Once efficiency and employee acceptance improved, Burt formed a team to review and update the attendance program. The outcome to this collaboration was a new Attendance Reward Program which is based upon reward rather than punishment. Employees at US Button earn scheduled time off as a reward for good attendance.
RESULTS
The new mold cavities improved product quality, operator
efficiency and employee morale. Today, operator efficiency is
running 100%. The new mold cavities also allowed press operators to
focus on quality. As a result, the operators reduced scrap from
3.78% to less than 1% in a four year period. Eventually the company
reduced temporary labor in the molding and inspection department by
40%. This also meant less time, effort and money spent on human
resource costs from constant ramping up and down. Regular employees
were more productive and earning more money from their incentive
programs.
US Button uses The Supermarket (kanban) to ship 85% of its sales volume from stock. WIP has been reduced from 1000 lots to the current 180 lots. On-time delivery decreased from six weeks to one day, with deliveries hovering near 100%.
Overtime has been reduced by 80% because of improved productivity and the new Attendance Reward Program. Unscheduled absenteeism is now at an all time low of less than 1%.
SITUATION TWO
Burt's success working with CONNSTEP on the Lean conversion
prompted him to call again when he needed help with the wastewater
treatment process. The company was experiencing sporadic spikes in
the zinc levels from its wastewater treatment system and needed to
reduce zinc concentration in effluent to a maximum daily value of
less than 3 mg/l. Burt initially contacted a consultant who
recommended a very expensive solution with new equipment.
SOLUTION
CONNSTEP consultants worked with US Button to find the root
cause of the problem and to offer a workable, cost effective
solution. They conducted sampling and analysis of tap water,
melamine powder, process sinks, influent wastewater in floor sump,
and effluent to determine levels of zinc. They also conducted bench
scale treatability studies to determine optimum treatment chemical
and pH precipitation of dissolved zinc. After a few months,
CONNSTEP recommended a new treatment application within the holding
tank which offered a cost effective solution with the needed
results.
RESULTS
The cost for CONNSTEP's solution used the current
equipment and cost about $5,000, compared to the initial, more
elaborate solution quoted at $35,000. Once again, CONNSTEP proved
to be a valuable business partner to US Button.
OVERALL RESULTS
Lean principles have helped US Button survive. By
2006, the company saw an across the board improvement of 20% to
30%. Between 2006 and 2008, the company continued its Lean Journey,
re-inventing processes, finding new ways to improve safety, and
continuing to improve morale.
By 2008, the company was able to report the following results:
A sales increase of 2.4%.
Eliminating the second and third shift operations brought a 44%
decrease in labor and an energy
savings of 18%. The company now uses a
portion of these cost reductions to support the various
employee incentive programs.
By the end of 2008, payroll was reduced to 41% of sales. It was 55%
in previous years.
Unscheduled absenteeism was down to 0.83% in 2008. It was 3.27% in
previous years.
The mold room remains a focus, with an additional efficiency gain
of 2.8% achieved in 2008.
Overall, efficiency has improved 32% since
2003.
Scrap level reduced to less than 1% in 2008. It was 3.78% in
2003.
On-time deliveries climbed to 92.18% in 2008 and in early 2009 they
are averaging nearly 100%.
Before Lean, in 2001, they were 64%.
LEAN SUSTAINABILITY
Burt and his team have maintained Lean excitement
by continuing the journey. US Button conducts quarterly
departmental audits incorporating the 5S program, continuously
improves safety, training and retraining initiatives, attendance
goals, and meeting company standards for production and quality
standards. Group leaders are involved in departmental audits and
are tied to financial and attendance incentives.
In addition, Burt has created a quarterly employee opinion survey. This survey offers employees the opportunity to make suggestions and comment on life at US Button. In this way, the company keeps its pulse on employee morale and can promptly react to employee concerns and ideas. The journey has become the new culture at US Button.
NEXT STEPS
One of US Button's new initiatives for 2009 is to
become a greener operation. The plant is currently producing over
250,000 pounds of waste materials per year (raw resin, flashing,
sawdust, etc.). Although in process waste has improved by 8% since
2003, the company is working on a method to use all in process
waste - developing a new product line for the company and a new
opportunity for its customers.