National Program Helps Small Manufacturers Contend.

THE words "just-in-time manufacturing" might evoke images of vast automotive assembly lines, but the principles that revolutionized large-scale American manufacturing in the '70s and '80s are being applied on a smaller scale all over the country.

One small business that has recently switched to the just-in-time system is Gamblin Artist's Oil Colors, a small oil-paint manufacturer in Portland, Ore., that's owned and operated by Martha and Robert Gamblin.

Robert Gamblin is a painter who began making and selling oil paint more than 20 years ago, not long after graduating from the San Francisco Art Institute. "It's a rare and fortunate individual who is able to make a living through selling art," said Robert, who wanted to work as close to painting as he could. "There was a need for someone in this business to make paint with the artist in mind."

From a modest start in Gamblin's garage, making just three colors of paint, Gamblin Artist's Oil Colors now sells 87 colors of oil paint all over the United States and abroad, has 20 employees and owns its own manufacturing facility. The paints cost between $7 and $20 a tube. The Gamblins declined to state the company's gross revenue.

As the company has continued to grow, Gamblin's wife, Martha, co-owner and general manager, was trying to solve the problem of how to manage the increase in paint production.

"We started talking about making bigger and bigger batches of paint," said Martha. "Now, a 100-milliliter tube of titanium white weighs one pound. You add that up, and it's a huge amount of weight. When someone started talking about putting 400 pounds of paint on a rail above our heads, I knew I needed to talk to an engineer."

She found that manufacturing consultants charge about $200 an hour, a fee that a small business like Gamblin just couldn't afford. After talking to the Portland Development Commission, Martha found Charlie Martin, a manufacturing consultant for the Oregon Manufacturing Extension Partnership (OMEP). He guided the Gamblins through their transition from their traditional manufacturing system to the newer, leaner, just-in-time model.

Martin's fee, instead, was just $65 an hour, a rate that is subsidized in roughly equal parts by local, state and federal funding. "If I were doing this privately, I couldn't afford to work with most of them," said Martin, who advises about six different small businesses at a time.

Part of national program

OMEP is part of the Manufacturing Extension Partnership, a national network of not-for-profit centers organized in 1986 by the National Institute for Standards and Technology. The program has more than 400 centers around the country, at least one in every state and territory, and helps more than 20,000 small manufacturing businesses a year. Most of these businesses, like the Gamblin's, have 50 or fewer employees. Eligibility for participation in Manufacturing Extension Partnership varies by region.

"Old-style American manufacturing works on a push system," said Martha. "The whole system is about putting a pig in a python -- one huge bite that moves through the shop."

The Gamblins used to make colors in batches of 1,200 tubes of paint at a time, which would remain on the shelves as inventory for three to six months. Now they make colors in smaller batches -- about 500 tubes -- and they focus on producing a single type of color at a time, like different kinds of red all made on the same day.

"Many small businesses don't realize that we need a manufacturing philosophy," said Martha. "We increase creativity and increase flexibility by reducing variation."

After implementing new manufacturing strategies, the Gamblins cut their inventory in half and freed up about $200,000 in cash, which they plan to invest in capital growth and begin their first advertising campaign.

The equation is simple: Less inventory means more cash, and cash flow is king for any small business. "Each color turns twice as fast. We're not putting three months of product on the shelf," said Martha, "Now it's down to six weeks, so our cash returns twice as fast."

Inventory is just one of the changes the Gamblins have made since they started working with Martin and OMEP more than a year ago. Quality control has also improved. "In each station, we ask the question, 'Am I making good stuff?'" said Martha. "If the answer is no, the production process stops. The manager is called, and there's 20 minutes to make a decision. Adjust and fix, or pull. The decision gets made right at the station."

Every week, the 10-person production crew aims to solve one process-improvement problem as a team. Everyone is involved, from staff meetings to conversations and problem-solving on the floor. "This engages workers," said Martha. "They're not checking their minds at the door. We have better jobs, better teams, better management and a better environment for personal growth."

Martha has experience in business and management but said she still found the lean manufacturing system counter-intuitive at first. "We're well-educated people with good common sense," she said, "and we couldn't have done this without help."

Accepting changes

Charlie Martin's guidance and the help of OMEP have made it easier for the Gamblin's to implement new procedures, but the changes have not been easy for everyone to accept.

"We start looking at the shop floor as a system, and our goal is to improve the function of the whole system," said Martin. "Instead of being hierarchical, it's more of a team process."

But, added Martin, "not everyone works in this environment well. You do lose a small percentage -- the shop-floor folks prefer it. The people who get threatened tend to be first- and second-level managers, people who have struggled their way up."

In fact, during the transition, the Gamblins lost two employees -- a supervisor and a key operator -- who were not comfortable with the changes.

"It's traumatic," said Martha, "But it's the price of change."

On the front end of the business, Robert markets his paints through education. He travels around the country, visiting artists and schools, giving free lectures on conservation, materials and the history of oil paint. The company Web site gives a first-rate presentation of painting techniques using Gamblin products.

"If you're an artist, it's really important to know about different pigments and their different qualities," explains Aaron Fink, a Boston artist who paints for a living full time. "What makes one paint better than another is tinting strength, and Gamblin paint is really just pure pigment with a little binder."

Rick Rousseau, customer products manager for Blick Art Materials in Chicago, said, "What's amazing is that people identify themselves with this paint. Some people say they paint with oils, and his customers say they paint with Gamblin oils. They tend to think of themselves not as oil painters, but as Gamblin painters."

Jane Applegate is the author of "201 Great Ideas for Your Small Business," and is CEO of SBTV.com, a multimedia site providing small-business resources.