STRATEGY: PLACE OLD ON HOLD

In this issue we explore some novel approaches to employee training that support a broader lean manufacturing strategy. Though this may conjure up images of young companies, new brands and youthful cultures in your mind, we open instead with a report on Cincinnati Incorporated (Cincinnati, OH), one of the last build-to-order U.S.-based machine tool makers, a mature brand that has shipped more than 60,000 machines in its 111 years of operation.

Even after 100+ years, this company demonstrates a young outlook and willingness to embrace new ideas and technology: it is turning the tables on the economic downturn and positioning itself for the recovery, much as it prompts its own customers to do.

The company invested 10 percent of its 2009 sales and another 10 percent of sales this year to re-tool its plant and implement lean practices from top to bottom. Investments in machine tool upgrades and employee training will reduce lead times on built-to-order machines by 50 percent and increase capacity 30 to 50 percent ? without adding labor hours ? while reducing manufacturing costs and improving competitiveness.

This manufacturer of laser cutting systems, press brakes and shears has completely rebuilt its major machine tools with new controls, drives and spindles. All employees are receiving lean training during the current six-month period. According to president and CEO Michiel Schuitemaker, the company is taking advantage of the excess capacity created by the economic downturn to rebuild key machines, including a 100 hp Waldrich Coburg portal gantry mill, a twin-traveling column Mazak horizontal machining center, and a Makino HMC with a 40-in work cube.

In this tough economy, many manufacturers face the double-edged challenge of having to reduce staff and resist price increases to offset revenue loses. But although Cincinnati has reduced staff in the last year, it has retained machine prices at 2007 levels. ?At the onset of the recovery, quick delivery is going to be as critical as price,? states Schuitemaker. ?The rebuilds, coupled with lean practices, will be crucial to our objectives of increased velocity and plant capacity, even with a reduced workforce, that allow us to hold prices down through internal cost reduction.?

Employee training has helped redesign the entire production operation: its new demand-based JIT system helps reduce work in progress and cuts lead times down to as little as two weeks. ?We have right-sized everything we buy or produce to the quantity we have demand for,? explains Schuitemaker. ?Our goal is to make custom machines to meet our customers’ unique needs in the same time frame as others deliver standard stock machines.?

?One core competency is production of our own machine control hardware and software,? notes Schuitemaker. ?We recently incorporated surface mount manufacturing capabilities by purchasing pick-and-place robots and automated soldering machines that allow us to reduce lead times and use smaller components for smaller footprints on more complex circuit boards.?

Also demonstrating Cincinnati’s commitment to lean practices is the new web-based machine diagnostics/monitoring system that allows customers access to remote trouble-shooting services, and saves them time and money. ?We found that one-third of our service calls can quickly be solved using remote diagnostics,? adds Schuitemaker. ?And if a service call is required, remote diagnostics allows us to identify and ship the required parts so they are at the customer?s site even before the service rep arrives.?

Cincinnati releases regular software upgrades to its customers to take advantage of the latest manufacturing techniques. Schuitemaker stresses that Cincinnati engineers build their machines to the standard of ruggedness expected in the North American market ? so rugged, in fact, that many machines 15 to 20 years old fetch their original purchase price in the used market. ?It?s like having a 20-year money-back guarantee on our machine tools,? jokes Schuitemaker.

With this sort of focus, the company also uses nearly 100 percent North American components ? unheard of in times like these. And much appreciated.

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

Cincinnati Incorporated, Box 11111, Cincinnati, OH 45211, 513-367-7100, Fax: 513-367-7552, www.e-ci.com .

Mike Riley is the editor of Fabricating & Metalworking magazine and the author of Backfield in Motion (Derek Press, 2007). Share your views with him on how you are preparing for the recovery at 205-681-3393 or [email protected].