{"71038":{"#nid":"71038","#data":{"type":"news","title":"Duluth Manufacturer Improves Bottom Line with Georgia Tech Help","body":[{"value":"\u003Cp\u003ESpectral Response, a Duluth-based manufacturer of circuit boards, has a lot going for it. It just celebrated its 21st year in business, 70 percent of its workforce has been employed there between five and 10 years, and it won the 2008 Georgia Manufacturer of the Year Award from the Georgia Department of Technical and Adult Education and the Georgia Department of Economic Development. \u003C\/p\u003E\n\u003Cp\u003EBut Kevin Melendy, president of the company, says Spectral Response had to develop innovative ways of thinking to survive and thrive.\n\u003C\/p\u003E\n\u003Cp\u003E\u0022Like everybody, we faced an onslaught of competition from low-cost manufacturing. We had to find a way to compete,\u0022 he said. \u0022We had to either fight to survive or try to find new and expanding business segments that have higher margins and less competition, and those just don\u0027t exist.\u0022\n\u003C\/p\u003E\n\u003Cp\u003ETo improve the company\u0027s manufacturing process, Melendy turned to Georgia Tech\u0027s Enterprise Innovation Institute for assistance. Lean specialists Kelley Hundt and Jennifer Trapp-Lingenfelter initially visited Spectral Response to help streamline the way the company initiated product orders. After developing a value stream map - a diagram used to analyze the flow of materials and information required to bring a product or service to a consumer - they suggested the project focus on the entire manufacturing floor plan.\n\u003C\/p\u003E\n\u003Cp\u003E\u0022The factory floor was being driven by the how orders were loaded. If a customer called, we had to figure out a way to get it done, whether it was working nights, weekends or three shifts,\u0022 Melendy recalled. \u0022But as our business grew and the margin pressures were layered on top of that, we didn\u0027t have that luxury any more. We had to take an order from a customer and make sure our supply chain commitments matched up to our manufacturing processes.\u0022\n\u003C\/p\u003E\n\u003Cp\u003EAfter meeting with Spectral Response\u0027s leadership, Hundt and Trapp-Lingenfelter both thought the company\u0027s manufacturing process would benefit from a cellular design. At the time, the company was arranged in functional departments that caused excess work-in-process, long lead times and lack of flexibility. Cellular manufacturing, sometimes referred to as cell production, arranges factory floor labor into semi-autonomous and multi-skilled teams that manufacture complete products. These more flexible cells are able to manage processes, defects, scheduling, equipment maintenance and other manufacturing issues more efficiently.\n\u003C\/p\u003E\n\u003Cp\u003EAfter training the entire 137-member workforce on lean manufacturing principles, a cross-functional team of eight employees examined the \u0027before\u0027 process, brainstormed ideas and used lean tools to highlight areas of improvement. The team decided to shut down operations during the week of July 4, 2007, to re-arrange all of the equipment into nine different cellular production lines. \n\u003C\/p\u003E\n\u003Cp\u003E\u0022We used to refer to the floor plan as the snake, and a product had to travel through the entire snake, meaning it was in a single file. If we started a product on Monday, it might be ready to be shipped on Friday,\u0022 said David Shockley, vice president of operations. \u0022With the cell production, we can have nine parallel lines - much shorter in length - producing nine products at once. Now, products are ready to be shipped within 48 hours after the order is launched in the system.\u0022\n\u003C\/p\u003E\n\u003Cp\u003ENot only did the cellular design reduce the length of time from the order initiation until it was ready to be shipped, but it also helped with orders that needed to be re-worked or changed. Todd Owens, lean manager for Spectral Response, estimates that inventory in this area was cut by more than one-third. \n\u003C\/p\u003E\n\u003Cp\u003E\u0022Before, the boards that did not pass the testing area would just get set aside into what we called the bone pile. We would have to find time to go back and re-work them, and that inventory became a significant dollar amount,\u0022 he said. \u0022Now, we handle the failed board as we run them through the individual cells. A year ago, the value of the bone pile inventory was more than $300,000; today, it\u0027s around $80,000.\u0022\n\u003C\/p\u003E\n\u003Cp\u003EAs a result of the lean implementation, Spectral Response has seen a number of impressive impacts. Total work-in-process has decreased by more than one-half, from $2 million to approximately $800,000 worth of inventory. Lead times have been cut in half, overtime is down from 15 percent to less than five percent, and there is 40 percent more floor space for future growth. Melendy also estimates that the company\u0027s electricity bill has decreased by 20 percent, since it is using big, power-hungry equipment less. \n\u003C\/p\u003E\n\u003Cp\u003E\u0022It\u0027s easy to quit on this because it\u0027s difficult, but ultimately you come out on the other side with a company that\u0027s more efficient and better run than when you first started,\u0027 Shockley noted. \u0022In July 2008, we will implement cell number ten, and it will be our highest volume product. We are committed to this being a never-ending, continual process.\u0022 \n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003EAbout Enterprise Innovation Institute\u003C\/strong\u003E:\u003Cbr \/\u003E\nThe Georgia Tech Enterprise Innovation Institute helps companies, entrepreneurs, economic developers and communities improve their competitiveness through the application of science, technology and innovation. It is one of the most comprehensive university-based programs of business and industry assistance, technology commercialization and economic development in the nation.\n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003EResearch News \u0026amp; Publications Office\u003Cbr \/\u003E\nEnterprise Innovation Institute\u003Cbr \/\u003E\nGeorgia Institute of Technology\u003Cbr \/\u003E\n75 Fifth Street, N.W., Suite 100\u003Cbr \/\u003E\nAtlanta, Georgia 30308 USA\u003C\/strong\u003E \n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003EMedia Relations Contacts\u003C\/strong\u003E: Nancy Fullbright (404-894-2214); E-mail: (\u003Ca href=\u0022mailto:nancy.fullbright@innovate.gatech.edu\u0022\u003Enancy.fullbright@innovate.gatech.edu\u003C\/a\u003E) or John Toon (404-894-6986); E-mail (\u003Ca href=\u0022mailto:john.toon@innovate.gatech.edu\u0022\u003Ejohn.toon@innovate.gatech.edu\u003C\/a\u003E).  \n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003EWriter\u003C\/strong\u003E: Nancy Fullbright\n\u003C\/p\u003E","summary":null,"format":"limited_html"}],"field_subtitle":"","field_summary":[{"value":"With help from Georgia Tech lean manufacturing specialists, an Atlanta manufacturer of circuit boards improved its bottom line by reducing lead times, work-in-progress, overtime costs and electricity bills.","format":"limited_html"}],"field_summary_sentence":[{"value":"Lean techniques helped a Georgia manufacturer cut costs"}],"uid":"27303","created_gmt":"2008-08-21 00:00:00","changed_gmt":"2016-10-08 03:03:19","author":"John Toon","boilerplate_text":"","field_publication":"","field_article_url":"","dateline":{"date":"2008-08-21T00:00:00-04:00","iso_date":"2008-08-21T00:00:00-04:00","tz":"America\/New_York"},"extras":[],"hg_media":{"71039":{"id":"71039","type":"image","title":"Spectral Response worker","body":null,"created":"1449177338","gmt_created":"2015-12-03 21:15:38","changed":"1475894628","gmt_changed":"2016-10-08 02:43:48"},"71040":{"id":"71040","type":"image","title":"Circuit board","body":null,"created":"1449177338","gmt_created":"2015-12-03 21:15:38","changed":"1475894628","gmt_changed":"2016-10-08 02:43:48"}},"media_ids":["71039","71040"],"related_links":[{"url":"http:\/\/innovate.gatech.edu\/lean","title":"Lean manufacturing"},{"url":"http:\/\/www.innovate.gatech.edu\/","title":"Enterprise Innovation Institute"}],"groups":[{"id":"1188","name":"Research Horizons"}],"categories":[{"id":"129","name":"Institute and Campus"},{"id":"131","name":"Economic Development and Policy"}],"keywords":[{"id":"2920","name":"competitive"},{"id":"1676","name":"lean"},{"id":"215","name":"manufacturing"},{"id":"237","name":"Productivity"}],"core_research_areas":[],"news_room_topics":[],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cstrong\u003EJohn Toon\u003C\/strong\u003E\u003Cbr \/\u003EResearch News \u0026amp; Publications Office\u003Cbr \/\u003E\u003Ca href=\u0022http:\/\/www.gatech.edu\/contact\/index.html?id=jt7\u0022\u003EContact John Toon\u003C\/a\u003E\u003Cbr \/\u003E\u003Cstrong\u003E404-894-6986\u003C\/strong\u003E","format":"limited_html"}],"email":["jtoon@gatech.edu"],"slides":[],"orientation":[],"userdata":""}}}