Small firms forced to practice 'lean' manufacturing.

Traditionally thought to be applicable only to manufacturers with high volume production, a method called "lean manufacturing" is making its way into smaller firms--in part as a voluntary move, in part because it is the only way they can survive.

San Fernando Valley manufacturers, many of which are aerospace-industry oriented, have had a pickup in business so far this year thanks to improvement in the commercial airline industry and increase defense-related orders. But, the big guys are asking the little guys to perform faster and cheaper than before. And that's where lean comes in.

Lean manufacturing is essentially a technique that involves making parts more efficiently through concentrating all machines and tools in one area, as opposed to different areas in one facility. Also, it involves setting up the workplace with parts better identified by signs and colors.

Glendale-based Steer Engineering, a 300-plus employee subsidiary of Eaton Corp., has sponsored a lean manufacturing training program for firms on its supply chain. The first installment of the 10-month program was funded by the federal and state governments, as well as Eaton, and concluded this month.

To have 50 percent of the training paid by the funds, "suppliers needed to demonstrate they were affected by global competition," said Tom Mendoza, Steer's supply chain manager who selected the participants, two of which were Valley-based. The companies were Riggins Engineering in Van Nuys and Valencia-based True Position Technologies.

During the training, lean experts taught company representatives in a classroom setting the various parts of lean, including how to reduce waste and non-value added time, or essentially time when parts are not being manufactured and go through other processes such as transportation from one machine to the next.

Mendoza said he was planning to continue the workshops.

"I'm going to get another set of suppliers, probably in another two months," he said.

How soon training will start will depend on how quickly government subsidy is secured, Mendoza added.

Joe Grossnickle, president of Riggins, which employs 40 and manufactures aerospace, military and commercial aircraft parts, is resorting to lean training out of necessity. Although he has been familiar with lean for about three years, when the company's management began reading literature on it, he didn't decide to approach it until being "invited and strongly encouraged" by Steer.

"Our customers are insisting that we implement lean and demonstrate that to them or they don't really want to do business with us, because there's no opportunity for them to reduce prices," Grossnickle said.

It is too early to tell if Steer workshop results will translate to savings in Riggins' bottom line, he said, but there are positive signs. For instance, the team of newly trained-in-lean Riggins employees reviewed workflow on a job that Riggins "has been running for years," Grossnickle said.

They eliminated three operations, combined them with others, and reduced the setup time from 16 hours to five. And that serves an important purpose:

"When a customer comes back and demands reduction of 5 percent, there's something to talk about," Grossnickle said.

Another company starting to get into lean is EFS Aerospace, a Valencia-based company that employs 175 and manufactures hydraulic parts for military and commercial aircraft.

Training course

It sent some employees for a 10-week training sponsored by Lockheed Martin, one of its customers, said EFS President Brian Barrett. The cost of the training was also offset with state funding.

The next step, Barrett said, will be to send one management employee to Spokane, Wash.-based Triumph Composite Systems, a firm owned by EFS parent Triumph Group, based in Philadelphia.

"(The EFS employee sent to train) will come back and be our lean implementer," Barrett said.

Barrett said all Triumph companies were getting lean training at that facility, which was once owned by Boeing. The defense contractor had invested resources to have it operate lean, so it serves as a model for other firms. Overall, the main benefit Barrett sees in going lean is in cost reduction.

"In the industry we're in, aerospace companies are asking for regressive pricing. They expect us to be more efficient, so that translates to lower price," Barrett said, "so we can continue to make money although we're selling for less."

On a general note, he said, "aerospace industry hasn't accepted lean because it was thought of as something that is for high volume (manufacturing). That was conventional thinking--people are slowly understanding (it can be) applied. Aerospace has been slow to get on board, but it's been catching up very quickly."

Lean expert

Robert's Tool in Chatsworth has had much success with lean since implementing it in 1999. The company was introduced to lean by its customers, including Eaton, and eventually hired a lean expert. That person is flown in and put up in a hotel every week to train Robert's Tool employees, said company president Brad Hart.

Because it implemented lean, the firm was able to overcome the economic downturn after Sept. 11 and is better fit to compete with China, which offers cheaper labor, Hart said. Implementing lean techniques, Robert's Tool is able to fulfill orders much faster than its competition, and geared up to serve the defense sector. As result, revenues nearly doubled, from $7 million to $13 million, with an addition of about 15 more workers.

"Because of this, we've picked up customers all over the world," Hart said.

The cost of transitioning to lean is a hurdle at Arleta-based Superior Thread Rolling.

"I kind of hit the plateau," said owner Tom Lundy.

He couldn't afford to keep putting money into training because of Sept. 11.

Nevertheless, Lundy observed the shift to lean is a major change for the industry.

"It's a real paradigm shift in the way manufacturing has been done," he said.