An Ohio Producer of Printed Circuit Board Assemblies
Company
- Contract assembler of printed circuit boards, related electronic products, and control panels for industry.
- Established in the early 1970s by entrepreneurs, the recently company brought in new management to help lead the company in a new direction and to implement the professional systems and structures needed to get there.
- 40-50 employees
- Serves various end markets for equipment such power management systems, medical devices, emergency services, aviation, and glass manufacturing.
Situation
- Foreign competition and the dot-com crash had left the company's financial structure badly damaged.
- Sales had been up slightly one year and then down the next with negative net income.
- Just before the recession, the firm lost significant business in 2 of its 3 major accounts to Chinese competitors.
- The company had recently re-focused its strategy to become a small-batch job shop for high quality, complex PCB work with value-added services.
Approach
- GLTAAC's assessment of the company identified two priorities:
- Top priority – reducing costs through improved skills and training for production staff;
- Next – increasing sales through major marketing and re-branding efforts.
- Marketing support via a website makeover plus design/layout work for new brochures (in time for an industry trade show).
- Production efficiency improvements via LEAN manufacturing implementation
- Operator skill improvements, also geared towards improving efficiency.
- In addition to these cost-shared initiatives, the company pursued new market opportunities aligned with its small batch/high value strategy and improved several internal systems utilizing only internal resources.
Actions
- A major LEAN manufacturing project to improve productivity in production, the stockroom, and overall production flow.
- Extensive training was conducted with management and employees to support strategic planning, improve skills, and increase productivity.
- A new website was developed to reposition the firm, target new markets, and attract new customers.
- In house, the firm has finished its first cycle of new customer identification and sales strategy development.
Results
- Through the LEAN project, the company:
- Improved shop floor production rates by 22%,
- Reduced work-in-process inventory from 25 days to 10,
- Cut production lead times by 50%,
- Doubled machine usage rates,
- Reduced price quoting lead times from 6 weeks to 4 days.
- While sales have yet to match pre-recession levels, the firm has achieved much success, including:
- Attracting 20 new contract customers via its new Job Shop message,
- Improving profitability and cash flow despite the recession,
- Improving worker morale and teamwork,
- Earning more new quoting opportunities than ever before.
- The company has strengthened its balance sheet significantly while sales continue to climb steadily.
- This firm has now completed the program and its future is bright.