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Successful Implementations in Lean

Precisely the Right Layout for Phillips Precision


Even in a down year, Phillips Precision brought in eighteen new customers and maintained their sales from the previous year due to their diligent sales and marketing efforts.

During difficult times when other shops were closing their doors, Phillips Precision was innovative and savvy enough to grow their client base. Cathy Phillips recognized that publicity from the company’s move to a new location could work to their advantage. They used the facility relocation to help them target emerging markets and potential clients by showcasing Lean manufacturing practices, efficiency and flow. This growth strategy worked. The uncertain economy caused businesses to look more closely at their supply chain. In doing this, they recognized that other suppliers were not as committed to quality process and technical advances and decided to do business with Phillips instead. This is how, even in a down year, Phillips Precision brought in eighteen new customers.

Text Box: As a result of their training, Phillips was able to shave 20% off the assembly time and has seen a 30% reduction in time needed for quoting and inventory management. There has also been a cost savings of $12,000, an increase in investments of $105,900 and growth necessitating the addition of an employee.

In 1997, Cathy and Steven Phillips began building a business together while simultaneously raising their family. Steven, who has always loved creating things with his hands, grew up working in his father’s machine shop and was schooled as a machinist, draftsman and programmer. Cathy has a strong background in business operations, marketing and distribution and loved the idea of helping her husband build a business around his passion for machining and his talent for invention. Together, this successful team are the creators and co-owners of Phillips Precision, Inc.

The Phillips began their operation in a 1,200 sq. ft. garage bay, gradually adding two employees as they cautiously grew their young business. In 2003, they were able to buy out Steven’s father’s machine shop and relocated his machinery and three additional employees to the same building.  “By blowing out the wall in between the two bays we tried to create flow and make it feel like a cohesive business but the layout really had its drawbacks,” says Cathy. The space inhibited their capabilities and forced them to locate machinery and materials wherever they would fit rather than where they would be most efficient. Despite these drawbacks, the company continued to attract new clients and secure its reputation as a top notch machine shop.

In late 2007, with ten full and one part-time employee, the space constraints of a crowded shop had become prohibitive.  The Phillips began looking for a site for a new facility somewhere in Boylston, Massachusetts, where they live and have ties to the community. They quickly found a suitable location but zoning issues caused costly delays. “Then right about the time the steel framework was going up the stock market was crashing,” says Cathy. It was a very uncertain time, but due to cautious planning and saving, the project continued.

2009-2010 was a tough year for everyone and business was incredibly slow. Many machine shops closed. As she looks back, Cathy sees an upside to the slow spell in that it allowed them to work on their continuous improvement plan and complete a good amount of Lean training with the Massachusetts Manufacturing Extension Partnership (Mass MEP).The projects proved to be quite helpful as the company moved forward.  In fact, Cathy believes they came at just the right time!

 “Everyone at the MassMEP seems to be cut from the same cloth. They have the same demeanor and level of professionalism and it has been a great experience working with them.”  Catherine Phillips

Innercity Entrepreneurs (ICE) had recommended the Mass MEP when Cathy was looking for assistance with Lean Manufacturing Training. She began by working with project manager James Gusha on a grant application for Workforce Training Funds. “I used to write grants,” says Cathy.  “It is a horribly time consuming process and I just couldn’t give that amount of time with the business. Jim was a great help to us getting the application together.”

For their Lean training and Plant Layout work, project managers Kevin Smith and Charley Lincicum worked with the Phillips staff. These began with 5s Kaizen activities at the old shop to help them purge prior to the move. The end result was a very smooth move in February of 2009.  The new facility was designed to accommodate the machinery and materials Phillips Precision already had and left space for anticipated purchases or future expansion. “The employees used the spaghetti diagram to see how much wasted travel and movement we experienced,” said Cathy. Through the plant layout exercises they were able to plan the placement of departments and machines where they made the most sense and would allow for the best flow before anything was moved.

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In the mezzanine area the Phillips left ample space for storage and expansion but, the major attraction here are the two assembly benches used for work the company does for a major client. In their Kaizen mandate the employee team identified problems with the area including disorganization, lengthy assembly time, lack of flow, quality issues and the need to manage inventory more efficiently. Value Stream Mapping provided the group with a map of the way people and materials currently move through the process to determine what impediments were affecting ideal flow. Rolling assembly benches with lifts for heavier components were designed to be repositionable to accommodate the specific products. These have clamps which hold work at various heights, attached pegboards outfitted with tools exclusive to each assembly and point of use storage of parts within arm’s reach. By working with their suppliers, many component delivery hold ups and quality issues were resolved. The area now has a supermarket of components and utilizes visual replenishment signals minimizing down time. The assemblers recognize the necessity of quality at the source and inspect work throughout the process.  After learning about Kaizen from the MEP staff the Phillips team held a second event in Assembly to continue to organize and improve the area and develop some standardization for the assembly process.

The employees have really embraced 5s in the new facility and have implemented it throughout. Every work station has its own color which outlines the shadow boards and stripes the tool handles so visually it is easy to see when something is out of place. In addition they have put lines on the floor to indicate proper locations of materials and machines; labeling and signage is also visible throughout. Everyone is disciplined about putting items where they belong – they are proud of their workplace and keeping it neat and “tour ready” has become second nature. The Phillips often invite groups in to tour their business and are active in educational programs that promote manufacturing careers.
A sluggish period and the new environment at Phillips Precision proved to be very conducive to Steven’s creativity. The entrepreneur has designed and patented clamp devices to hold work while it is machined or inspected.  Thinking in Lean terms, Steve invented these devices to save time and waste during machining, changeovers and inspection. They are sold through a master distributor and have provided a nice side business, The Pitbull Clamp Co., Inc. which Cathy and Steven co-own.

Their ingenuity and inventiveness are reasons why Worcester Business Journal honored Phillips Precision as a 2010 Innovation Award winner and featured a story about their new Lean inspection work holding devices in the October 11th edition. The publication states that “the five companies being honored share the understanding that innovation is an absolute requirement for survival.”  

With two new machines on the way by year end, to replace older, less productive models, the Phillips continue with their forward focus. What’s next for this couple who have found success by looking for opportunities to meet the needs of others? “Well, we would like to train one of our employees as a point of contact person to take on more of the facility operations,” laughs Cathy.  “Then maybe Steven and I might actually be able to get out of the office once in a while.”

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