Kevin Gray has made his mark at Lauren International Inc. pushing lean manufacturing and continuous improvement, but he'd be the first to admit his company has a long way to go in the process.
New Philadelphia, Ohio-based Lauren International is made up of five different companies, and Gray started the process in 2002, not long after he took the firm's helm, first as chief operating officer and now as president and CEO.
``People ask how far along into it we are, and we believe we've taken a couple of baby steps toward really becoming a lean manufacturing company and really understanding continuous improvement,'' Gray said.
He made the remarks during his keynote address at the International Silicone and Rubber Molding conferences, held April 17-18 in Dearborn, where he was presented with a plaque honoring him as Rubber & Plastics News 2006 Rubber Industry Executive of the Year.
Gray said one of the simplest changes made at the Lauren Manufacturing operation was institution of a single-piece flow, where you start the product on one end of the facility and you finish it at the other end and ship it to the customer.
``We had not been doing that,'' he said. ``In fact we had one whole entire part of the plant dedicated to work in progress.''
Gray, a 24-year company employee, first helped implement some of the changes when he headed Lauren's Edgetech operation in Cambridge, Ohio. Since beginning the lean process, Lauren's inventory turns have gone from six to seven a month all the way up to 27-31 a month.
``We've got products coming in and we're turning those into products that can be sold immediately,'' he said. ``It frees up cash flow. It allows you to put your money into more equipment.''
It also cuts down on one of the bad words around Lauren-inventory. ``We look at inventory and believe that's a negative. Inventory is a way to cover up the sins of the operation.''
Breaking with tradition
Putting a lean mindset into a business isn't easy and takes enthusiasm from the top, Gray said, but also needs the involvement of all employees. Often, it's the lowest-level people who have the best answers. Most of all, it just takes plain hard work.
``It's unbelievable the amount of dedication, it's unbelievable the amount of time and energy it takes to get this started,'' Gray said. ``We were very fortunate to have a work force that was willing to buy into the concept and work with us on this.''
For Lauren, it really was a matter of completely changing the way it looked at the business. Gray said the firm had been a traditional manufacturer, seeking to find customers who wanted to purchase 100,000 to 250,000 feet of product.
``We quickly realized that even if we could find those customers, we no longer wanted to run the machine for 250,000 feet at a time,'' he said. ``We wanted to look at ways and methodologies that we could put in place that we could actually manufacture products and serve multiple customers in the same period.''
Today, the company tries to minimize runs, aiming for a two- to four-hour time frame. That allows Lauren to serve the needs of from six to 12 customers, where in the past it would tie up a machine for three to five days and serve just a single customer.
Gray stressed that it's not enough to look at just the operating side of the business with lean and continuous improvement programs. Often more waste can be found in the back office. His company is looking at its accounting and human resources areas for potential gains.
Sales and marketing is another area under review at Lauren. The company CEO was ashamed to admit that sales and marketing probably function not much differently now than when he joined the company.
``We're looking at better and quicker and easier ways to get product to market,'' he said. ``Anytime we can identify a supply chain that has multiple steps, we believe there's an opportunity for us to improve.''
Keys to future success
Gray said the keys to future success really aren't all that profound-but that doesn't mean they're easy.
The first step is to make sure you have the right people in the right positions. ``If you can have the best possible players on your team, then there's a high probability you're going to be successful.''
He said he's heard all the excuses and doesn't buy any of them. To those who say a low unemployment rate makes it tough to find good people, he counters: ``If we're looking in the unemployment line for our employees, then we have other issues we need to be dealing with.''
And for those who argue they can't afford to hire the proper talent, he says you can't afford not to. ``The marginal salary difference between an average player and a top player can be eaten up within 30-45 days of seeing a No. 1 player working in your organization,'' Gray said.
It's also vital to create a culture that accepts change. Again, very easy words to say, but something that takes a lot of work and courage to set up, he said.
``Companies that are changing and finding new ways and taking risks and putting themselves out there are going to be the companies that survive and grow,'' he said, ``and that's a culture we want to make sure we create at Lauren International.''
Another must is investing in research and technology to continually bring out new products and ideas. Lauren spends a lot of time and energy focusing on this area, and strikes out more often than it's successful, but that doesn't stop it from continuing to try, Gray said.
``I think that's something as U.S. manufacturers we have to do more of, not less of,'' he said. ``With earnings pressure, it's going to be more and more difficult to find leaders who put their money where their mouth is and look for new opportunities.''
Finally, companies must have a burning desire to spoil their customers. With globalization making the world smaller, there are opportunities to prosper for firms that understand the value of building relationships with the customer base.
Lauren used to have the attitude that customers were lucky to do business with the firm. Now that attitude has shifted 180 degrees.
``We believe that most products that we manufacture can also be manufactured less expensively somewhere else in the world,'' he said. ``But we do believe if we can build a relationship with our customer base, it's something that will be long-lasting.''
Gray said he's not at all pessimistic about the future of rubber and plastic product manufacturing in this country. In fact, he expects Lauren to add another company to its stable within the next couple of months.
But one thing is for certain, he said: things will change and they will change quickly. ``If we're doing the same thing 90 days from now that we're doing today, we believe without question we're being bypassed by our competitors.''