Within six months of Priest's original meeting with Luna, his company had developed a prototype smart pipe. The pipe is now being tested by a large paper company in Old Town, Maine. "This can probably increase our revenue by 20% once it's fully developed," says Priest.
Priest has received help from MEP on the financial front, too. After McGregor and Karvonides coached Priest and a few Kenway employees on the art of grant writing, Kenway won a $100,000 grant from the Maine Technology Institute. "What people like Nick and Tobin have is the contacts to help us quickly move in a different direction," Priest says. "In a small company like ours, you sometimes have an idea; then you realize how difficult it is to pursue it, and you say, 'The heck with it -- I'll just keep doing what I'm doing.' But these guys can help open the doors to new opportunities." The result: innovation where you'd least expect it. We'll see more of the same as companies like Kenway gain access to sophisticated technology.
In fact, the Kenway project typifies the MEP way of helping manufacturers. Priest's initial meeting with Richard Parnass has spawned a web of relationships that extends far beyond the government program. MEP center directors are encouraged to forge ties with outside consultants, universities, trade groups, research-and-development programs, and economic-development organizations. Their success in leveraging those connections is actually one of several checkpoints in each center's mandatory two-year review.
When Priest starts seeing tangible results from his new venture, MEP in Gaithersburg will know about it, too. So obsessive is MEP about measuring results that Carr has an independent company survey the program's clients nationwide every quarter. Among the questions asked: Did MEP help boost revenues? Reduce lead time? Beef up employee skills? Cut costs? "I haven't seen a federal program that's been more aggressive in holding itself accountable to clear returns on investment," says Karvonides of the Maine MEP.
Lean, Mean, and Green
While MEP is adept at calling in reinforcements from hither and yon, the program also offers its own impressive stable of on-staff experts. Many are well versed in the particulars of what's called lean manufacturing, or "lean" for short. Lean manufacturing, which originated at Toyota, is essentially a method of identifying and eliminating shop-floor waste and inefficiencies. The MEP centers market lean aggressively. They often call on small manufacturers to sell them lean consulting services.
One such call was exactly what Pat Burns overheard three years ago. Burns is manufacturing-plant manager at Numonics Corp. (revenues: approximately $10 million), a manufacturer of collaborative communications devices, such as digital whiteboards, based in Montgomeryville, Pa. His ears perked up when he heard two men talking with his company's engineering manager. "They mentioned some buzzwords like value-stream mapping and cellular manufacturing," remembers Burns, who was then grappling with some thorny production issues. As it turned out, the two were Rich Stewart and Keith Ashlock from the Delaware Valley Industrial Resource Center (DVIRC), a MEP center, and they were not strangers to Numonics. In fact, Stewart and Ashlock had led Numonics through reengineering back in 1993 and later helped the company achieve ISO registration. Now, Burns thought, they might be able to help him as well.
Numonics had developed a computer peripheral -- an electronic pen -- that had a problem: though the pen was superior to its predecessor, manufacturing times were lengthy and failure rates were high. Ashlock and Stewart suggested a course of action to Burns, using lean-manufacturing methodology, to make improvements. Not long after, DVIRC began a series of four two-day training sessions in lean manufacturing for Burns's employees. Many of the workers were initially skeptical. "The company had never invested in this kind of training before, and it was totally new to them," explains Burns. So Stewart and Ashlock led Burns's staff through a "kaizen blitz," in which employees help break down the manufacturing process on paper, redesign it into work cells, and then go into the plant, move machinery around, and run products through their new system. When the changes were made, says Burns, "it was the employees' system," not one that been foisted upon them by management.
"In a small company like ours, you sometimes have an idea; then you realize how difficult it is to pursue it, and you say, 'The heck with it. I'll just keep doing what I'm doing."
--Kenneth Priest
The first manufacturing cells were up and running within three months, and Burns saw dramatic improvements within weeks. Production time for a single pen dropped from nearly 50 minutes to just 17. Failure rates were slashed from more than 45% to just 1.2%. Moreover, Burns says his training in lean manufacturing helped him analyze every aspect of production--a process that revealed an unexpected source of product failures. "We broke everything down and found out that the biggest failures were due to PC boards, a component that we don't manufacture," he says. "We went back to the vendor, and they corrected the problem."
Three years after that project with DVIRC, the cumulative effect of MEP's involvement is dramatic: Numonics can now produce and ship products the same day. The company also has reduced its inventory from $1.5 million to $800,000, cut 8,000 square feet of production space, and increased annual inventory turns from 5.5 to 9. While Numonics' revenues have been pummeled by the recession, the company remains profitable. "If it weren't for lean, I don't even like to think where we'd be," says Burns. "We'd be in the red, and our inventory would be through the roof." For all that, the initial project cost Numonics just $13,000, according to Burns.
