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JAMES FLANIGAN

Firm's 'Lean Manufacturing' Shows Way to Boost Efficiency

May 17, 2000|JAMES FLANIGAN

Ace Clearwater Enterprises, a small aerospace parts manufacturer in Torrance, and its big customers, Honeywell and Lockheed Martin, are demonstrating today just what Federal Reserve Chairman Alan Greenspan refers to when he cites the improved productivity of U.S. industry.

Ace Clearwater, a company of 206 employees and $28 million in sales that is renowned for welding aluminum and specialty materials for missiles and aircraft, got a crash course last week from Honeywell and Lockheed in "lean manufacturing" and world-class "Six Sigma" quality control procedures.

The big companies didn't give the instruction to correct a lagging supplier but to make a good one better.

Ace Clearwater's duct work is used in aircraft heating and cooling systems and missile fuel tanks that Honeywell (formerly Allied Signal) makes at its nearby engines and systems plant in Torrance for Lockheed Martin's production facilities in Marietta, Ga., and Fort Worth.

The work is exacting, demanding highly qualified welders and machinists. Yet pressures to contain costs are intense on those big companies as they work for the Defense Department and commercial customers.

Both long ago adopted techniques, some of which originated in Japan, that eliminate waste and improve productivity. The techniques are deceptively simple--reducing the distance a part travels in its journey through the factory; eliminating inspections by giving discretion and responsibility to workers. Lockheed has cut production time for a single aircraft from two years to six months, as a result.

And, because of the instruction it received last week, Ace Clearwater will be able to cut lead times for parts orders in half, says Cathy Geiger, who was appointed lean manufacturing leader at Ace Clearwater.

Geiger is a veteran, having worked 21 years in the aerospace industry all over California. She's seen good times and bad. But today she's looking ahead to real improvement in her work.

"We have three other projects to implement, but we need to get this first one off the ground," Geiger says, gesturing around a neatly organized section of factory floor. "Operations used to be all over the place, but now we're organized."

Geiger isn't referring to simple housekeeping, but to serious and important reforms of work processes that cut costs and help workers keep and expand their jobs and businesses to prosper.

In the context of Southern California, where 180,000 manufacturing jobs have disappeared in the last decade, such programs offer fresh hope and new horizons.

Ace Clearwater, for example, will compete for new contracts and even become a training center for workers who want to upgrade to skilled work in welding that pays $24 an hour plus benefits.

Currently Ace has new work from General Electric, producing ducts for gas turbine generators that are in demand to alleviate shortages of electric power.

The firm hopes to use its new efficiency to bid for work on automotive parts, provided it can get government grants to train workers. It would be prohibitive to use expensive aerospace welders on auto parts, explains Gary Johnson, Ace vice president. "But we could become a good training ground for workers in this area and keep the best employees for our company."

Johnson's wife, Kellie Dodson, is president of Ace Clearwater, which her maternal grandfather founded as Ace Welding in 1949 in El Segundo. Her father, Tim Dodson, worked at and eventually bought the company, later acquiring a parts maker in Paramount named Clearwater.

"Business is tough," says Dodson, with the air of someone who fights--and occasionally wins--the good fight. Ace Clearwater's customers demand the equivalent of 6% price reductions every year, she explains. Yet she must invest up to $2 million a year in machinery and training if the company is to remain competitive.

The world economy is both threat and opportunity. "Some customers threaten to move work to Mexico or to China," says Dodson, who studied international relations at USC and worked at one point as a social worker in South-Central Los Angeles.

"But other customers give us long-term contracts that are good as long as our prices meet the targets," she adds. Honeywell, which merged last year with Allied Signal--which long ago acquired Garrett Aerospace--is a long-term customer.

These veteran companies are filled with young people and new ideas these days. Honeywell's lean manufacturing team consists of supply chain leader Rich Watson, an industrial engineer from the University of Michigan who worked for Toyota in Kentucky; lean/Six Sigma specialist Michael Quach, who came from Macao to take an electronic engineering degree at Cal State Los Angeles; and lean specialist Yenny Verastegui, born in Peru, raised in New Jersey, with an industrial engineering degree from USC.

Honeywell sent those skilled people to help Ace Clearwater improve its operations so that it can meet the just-in-time production schedules Honeywell itself must honor to stay in business. Ace, in turn, will bring reforms to its suppliers.

Cathy Geiger will train for four weeks at Honeywell's lean manufacturing facility in Phoenix so she can lead Ace Clearwater's effort.

The spread of such reforms can be a boon to this region. There are still 1,000 companies employing some 165,000 people in aerospace work in California.

Lean manufacturing and the oddly named Six Sigma reforms--which push quality and efficiency in all aspects of a company's operations--could make more of them competitive, which would mean more high-wage work for this area's abundant labor force.

It's an opportunity--and a necessity, as Kellie Dodson says: "Lean today, here tomorrow."

*

James Flanigan can be reached at jim.flanigan@latimes.com.

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