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“Because Insyte understood our internal issues as well as our corporate goals and strategic direction, they were able to effectively work with us to implement a lean manufacturing program that met our specific needs and contributed to the continued success of the business.”

Tom Rybicki, Director of Manufacturing

Colleen Hochadel, Polymer Conversions Technician, applies ultrasonic weld to adhere brass part to plastic housing for medical device.

Project Benefits

35% annual sales growth
5 new accounts added
20% reduction in lead time
99.3% on-time delivery
Inventory turns increased from 14 to 16 times annually
20% scrap reduction
>$100,000 in annualized cost savings
68% reduction in required warehouse space
>$2 million in capital expenditures avoided
22% increase in net profit before tax

Polymer Conversions, Inc. is a manufacturer of injection molded components for a variety of OEM applications in the medical, electronics, automotive and other industrial markets. The company's products are sold globally to such high-profile customers as Tyco Health Care, Abbott Labs, Sherwood Harsco, Air-Sep and Delphi. In recent years, the company has strategically focused on the medical device industry where it can effectively leverage its strengths in product design, tooling and molding as well as numerous secondary operations that include pad printing, hot stamping, ultra-sonic welding, assembly and a class 10,000 clean room. In addition to these extensive core competencies, the company has also demonstrated exceptional process control capability and customer response, which has enabled it to effectively compete with large multi-national manufacturers. Polymer Conversions' exceptional commitment to quality is seen in its ISO 9001:2000 registration and compliance with both GMP standards and FDA regulations.

Founded in 1979, manufacturing operations are conducted on three shifts within a modern, 40,000 square foot facility located in Orchard Park, NY. The company currently employs 85 people, including about 60 production personnel. Polymer Conversions has traditionally been a progressive, team-based organization where empowerment is promoted and people readily embrace change.

Situation

Despite steady growth and an apparent strong competitive position, senior management was surprised at their relatively poor industry performance in regard to inventory turns, scrap and overall profitability based on benchmarking data provided by the Society of the Plastic Industry. Upon further internal evaluation, management also identified deficiencies in production flow, excessive material handling and difficulty reacting to spikes in customer demand. Based on these observations, they recognized that the implementation of lean manufacturing techniques could help to resolve these issues. Due to limited internal resources, Polymer Conversions engaged the services of Insyte Consulting to support the introduction of these concepts into the manufacturing and support areas.

Solution

The first step was to introduce all employees to the principles of lean manufacturing through a full-day workshop which combined classroom lecture with a live simulation. Not only did this session provide basic knowledge in lean manufacturing methodology, but the participants were also able to relate to how these concepts could be applied in their specific work areas.

The next step was to complete a high-level value stream map of the entire organization. Subsequently, the value stream mapping exercise for both current and desired future states enabled the combined teams of Polymer Conversions and Insyte Consulting to formulate a comprehensive implementation plan utilizing the appropriate tools of lean manufacturing for each of the major product lines. Based on the results of the mapping process, cross-functional teams of six to eight members each were established for work place organization (5S), set up reduction, cellular flow and pull systems (Kan Ban). After receiving basic training and orientation, the teams began introducing these concepts into key production areas. Subsequently, the teams worked with the entire employee base to proliferate these improvements throughout the organization.

The lean manufacturing initiative was quickly embraced by the employees at all levels of the organization. Significantly, no turnover resulted from the dramatic changes that were made. Furthermore, key performance metrics were identified and clearly posted so that everyone could monitor progress and improvement on a daily basis.

Operational improvements were very quickly realized based on cost savings projected in excess of $100,000 annually. Similarly, average lead time was reduced by 20%, while simultaneously achieving on-time delivery of over 99%. Because of these improved efficiencies, inventory turns have increased from 14 to 16 times annually. The related increases in manufacturing capacity allowed the company to avoid an investment of over $100,000 for a new press. The Kan Ban system reduced required warehouse space by 68%, which eliminated the need for a planned facility expansion of over $2 million. In addition, scrap, which had been identified as a serious issue, was reduced by 20%. The operational improvements also helped generate a sales increase of 35% due to landing at least five new accounts and realizing increased penetration within the existing business base. The exceptional sales growth, combined with operational improvement, has enabled the organization to improve net profit before tax by 22%.

Despite the dramatic impact of the lean manufacturing implementation, Polymer Conversions has also recognized that continuous improvement is critical. For this reason they have added a full-time engineer, whose sole responsibility is continued lean manufacturing implementation. In addition, every new employee is required to take the lean manufacturing workshop as part of their orientation.

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