A customer might give you a look because of a business relationship, but that won't get you orders any more in the elastomers industry, according to John Quinn, president and CEO of Excel Polymers L.L.C.
Lean manufacturing principles are what it's all about today, Quinn told participants May 11 in a speech at the International Institute of Synthetic Rubber Producers annual general meeting. He recalled the reaction from some old-timers in the rubber industry when he came over from the plastics business, talking about value, engineering and Six Sigma.
``A few of the older folks said, `Hey boy, you don't understand. This industry is all about relationships.' I said, `OK, I'm willing to learn. Let's go to Detroit and tell me about what relationships exist there.' And a week later we came back black and blue.''
Instead, lean concepts allow a company to become connected to its customers at a new level, create a team culture, sharpen the firm's competitive edge and help combat the effects of inflation.
Focusing on the customer
Quinn said Excel-the world's largest custom mixer-uses a business solutions model that focuses on the customer, not Excel's products.
``We look at the customer's entire manufacturing process, the entire value stream,'' he said. ``We apply lean principles, which is elimination of waste, to every touch-point we possibly can.'' That includes order entry, product design, manufacturing processes, the supply chain, after-sales service and remittance.
Quinn said Excel is using an approach adapted from the old Chrysler SCORE-for ``Shared Cost-out Reduction Effort''-program. ``If you saved a dollar for Chrysler, you got half a dollar back. It was very motivating.''
The executive said measuring success is vital.
``You've got to measure everything,'' Quinn said. ``How many times have your technical and sales reps come back and said we had a great call, we improved the customer's throughput by 20 percent, we dropped scrap. Well, that's nice, everyone feels good for about a day. The point is, you've got to measure it to get the value.
``When there is such tension in costs, if you don't measure everything and be able to supply it to the customers, all those efforts we put forth are wasted.''
Knowing the SCORE
Quinn said in the SCORE process, the company targets benefits such as improved cash flow and labor utilization. Excel also seeks to find global sourcing leverage, efficient design, higher fixed asset utilization, faster business process and growth opportunities.
``With the rubber industry, it's my sense we are too profligate with our products. It causes you problems in (SR) manufacturing operations, and certainly with our customers, with 10 or 15 ingredients in the recipes they make. We're looking at working with our technology teams to do robust instead of unique formularies.''
Excel looks at a customer's production lines and tries to rationalize them, to have less variety, to cut out waste.
In terms of quality, part of the Excel approach with its customers concerns incoming materials inspection. ``Why do it twice?'' he asked. ``If we're certified with ISO, QF and all these other standards organizations, why do we have to have somebody at the back end of the customer's shop validating?''
Quinn called manufacturing operations ``the sweet spot of lean.''
``We look at scrap reduction, cycle times, setup time, product form. You know, rubber comes in bales and we're asked more and more to work with these to get them into a pelletized form or some other form so that it can be handled more like plastics.''
The executive said breaking down a bale in compounding takes time, and both SR producers and compounders should be looking at ways to change that.
Working on these issues, as well as throughput and efficiency, often can free up capacity for Excel, its customer and the SR producer.
Another area of concentration is the supply change, where transportation logistics and packaging configurations are studied. Quinn said there is much more emphasis today on returnable packaging.
Also, there are opportunities to be lean with order quantities and by combining purchasing power.
``Lots of suppliers have minimum standards now, and the distributors have a field day, but until we narrow down the product portfolio there will be proliferation that I believe is not healthy to the industry.''