Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 15, 1992 TAG: 9203140262
SECTION: BUSINESS PAGE: D-6 EDITION: METRO
SOURCE: By JIM BOHMAN
DATELINE: DAYTON, OHIO LENGTH: Long
Jones, vice president for operations, wanted his Shopsmith Inc. plant just north of Dayton to be like Japanese factories he read about - highly efficient and profitable with parts coming in the door as needed. No money wasted on warehouses full of costly inventory.
Workers assembling Shopsmith home workshop power tools would turn around to grab newly arrived or just-made parts. Gone was storing and lugging widgets from machining centers scattered around the 115,000 square foot plant.
The firm would work hand-in-hand with suppliers making sure all vendor-supplied parts arrived within 48 hours.
Employees would value their jobs so much they'd join small groups looking for ways to work smarter and make Shopsmith more profitable.
Jones awoke from his dream and decided to "do it." That became the official slogan for deflecting opposition to the upcoming factory upheaval.
The long Shopsmith changeover to working smarter began two years ago. Now Jones is giving tours and showing others that the Japanese concepts of "just-in-time" production, or kanban, and kaizen, or continuous improvement, can work here.
Copying the Japanese was OK for an American company, Jones told himself and everybody who asked. After all, the Japanese learned much of what they know from American engineer Edwards Deming 40 years ago and Henry Ford before that.
Carol Shaw, associate dean of the School of Engineering at the University of Dayton, says of Shopsmith: "They made some very quick changes for the better."
Shopsmith, she said, is one of thousands of U.S. companies using Japanese approaches to boost efficiency.
Others include the Delco Chassis Division of General Motors Corp., and Apex Cooper Power Tools Division of Cooper Industries.
Sometime back, Apex decided to use kaizen analyses to change the way it made metal working tools and universal joints for industry. Instead of making thousands of unfinished parts in batches, Apex executives re-examined what they were doing. They decided it would be smarter to take each part and American companies aren't so much aping the Japanese as they are learning what the Japanese added to concepts taught by Deming and others. make it into a finished piece before starting the next one.
One result, according to Bill Bross, manufacturing manager at the Stewart Street plant, is parts delivery time in some cases was cut from 45 to 10 days.
Shaw said American companies aren't so much aping the Japanese as they are learning what the Japanese added to concepts taught by Deming and others.
The Shopsmith shift is dramatic.
"We now use half the building for our 14 manufacturing cells," said Cliff Vernon, director of manufacturing. "Before we used the whole thing."
Another payoff: assembly lines are laid out more logically.
Machines that used to be across the building making specific parts now are part of the assembly lines, making parts only as needed.
No longer are stacks of incoming parts kept in inventory as sort of a security blanket. Now parts come in the door on demand.
Shopsmith converted the left over floor space into a distribution center. Now assembled Shopsmith Mark Vs, saws and other products fill the space awaiting shipment to stores and customers.
That alone saved the company $150,000 annual in warehouse rent. And by not having all that parts inventory lying around, the firm is saving an estimated $1 million annually, according to Jones.
"That may not show up immediately at the bottom line, but it sure helps our cash flow," Jones said.
The reorganization also made room for five assembly lines for five new products and cut labor needs by 32 percent. Two years ago the company had 168 employees in that plant, now it has 115.
The old Shopsmith wasn't like that. The Mark V assembly line stretched out 185 feet and took up 16,000 square feet of floor space in a congested factory building stacked high with cartons of parts. Machine shops here and there built parts until crates overflowed.
After just-in-time and kaizen principles were invoked, the new line is only 80 feet long and uses 6,400 square feet.
Convincing Chairman John R. Folkerth to make the changeover wasn't hard. Although skeptical, Folkerth needed to squeeze out every nickel he could because the firm has been losing money.
"But I'm still waiting to see improvements at the bottom line," he says.
Jones is confident they will arrive.
Fiscal 1992, already three-fourths complete, has been another difficult year for Shopsmith. Recession-driven losses in the first nine months hit nearly $600,000, or 26 cents a share. However, nine month sales are up 7 percent to $37.4 million.
The company's mainstay product continues to be the Mark V, 5-in-1 home workshop, a combination electric saw, lathe, drill press, disc sander and horizontal boring machine, a concept that dates back to 1947. The selling price is $1,000 to $1,500, depending on equipment.
The plant reorganization yielded space to add six assembly lines for new products, mostly attachments for the Mark V.
Today the Dayton factory also makes 14 woodworking equipment items, including a belt sander, the Sawsmith, a combination radial arm saw and table saw, a band saw, a planer, a joiner and a scroll saw.
Folkerth and Jones are optimistic that these new products plus equipment from other woodworking suppliers will spur sales at the firm's new Woodworking Unlimited retail stores.
by CNB