Growth Manufacturers Case Study
SMART Goals Help Lampin Improve Productivity, Lead Time, Growth
By Karen Myhaver, MACWIC Project Coordinator
Lampin Corporation, a high precision manufacturing, assembly, and design services company in Uxbridge, Massachusetts, thought things were going well. Unfortunately, there was a disconnect between Lampin's perception of performance and the perception in the marketplace. Lampin was delivering at a 78% on-time rate with lead times at 12-14 weeks and a 70-80% customer quality acceptance rate. Something had to change.
The 30 employee-owners produce a wide variety of MITRPAK spiral bevel gear boxes. Most products are produced in short runs. Lampin's machinists attempted to shave seconds off individual part production times, but with little effect.
The biggest challenge was to get people to see the value in changing. William DiBenedetto, Lampin's President, knew that companies who are growing are typically those willing to try new things and make improvements to satisfy their customers. So they hired MassMEP to address on-time delivery, productivity and capacity issues in order to grow and provide proven results.
The results were impressive and came quickly:
- 99% improvement in on-time shipping,
- 98.9% customer quality acceptance,
- 50+% increase in hourly productivity of direct labor employees,
- 64% decrease in lead-time within 18 months,
- Lampin's key production metric (dollars shipped as compared to each dollar spent on labor, direct/ indirect) increased from $85 to $130 per dollar of labor shipped within 20 months,
- + 22% growth in up line sales,
- +3% growth in gross margin,
- +100% growth in net margin, and
- 25-30% bonus growth (performance growth tied to gross profit).
According to DiBenedetto, "We can attribute much of these results to the efforts of MassMEP to help us change the way we think. The real value of working with project manager Rick Budlong has been his methodical way of thinking…the way his training bridges between theoretical and practical ways of doing things."
SMART Goals Program
The bulk of Lampin's costs were in labor and 45% of their labor was in set-ups. Through MassMEP's training, Lampin recognized the overall impacts of improving workspace organization and the way set-ups are handled. Lampin teams learned to utilize 5S Kaizen and Visual Scheduling. Set-up reduction became a focus of improvement activities freeing up time and capacity, allowing Lampin to migrate toward a simpler model.
"It is extremely difficult to do training when you need every person focused on production," shared DiBenedetto. "But if you don't invest the time, you won't improve or grow."
The fact that Lampin is an ESOP, an employee-owned business, has made things more complicated because they are constantly challenged by valuation - an annual process to determine what the company's per share price is.
The SMART Goals program became a key element in connecting Lampin employee-owners with their personal and corporate objectives. Introduced by Rick Budlong, MassMEP Project Manager, SMART Goals are Specific and Strategic, Measurable, Attainable, Realistic, Time- framed, and Tracked Goals that are documented, attainable plans. These plans help people know exactly what is expected of them and improve their status within their organization. Studies show that people who have goals suffer less stress, concentrate and perform better, show more self-confidence, and are happier. What gets measured gets done!
Typically SMART goals involve process or skill improvement activities. Goal attainment is tracked and has now become part of Lampin's employee-owner review process.
Ed Smith is a long time Lampin employee-owner with impressive skills around Swiss screw machining. DiBenedetto said, "Ed is very knowledgeable so we made sure that his new job function gave him opportunities to expand his influence. Now he has been empowered as a group leader and does a fantastic job imparting knowledge and teaching Lampin methodology to people with less experience."
Ed realizes as an employee-owner, that his retirement is only as good as the Lampin he leaves behind. His SMART Goal was to train other machinists in Swiss screw machine skills and help improve their CNC skill levels. To do this, he provides classes in Basic G Coding, PartMaker, and set-up reduction, which have also helped others achieve their SMART goals.
MassMEP's Budlong also shared TIPS - Team Involvement Problem Solving - and other team building and communication activities with Lampin staff. They have planned TPM Kaizen, total predictive maintenance, to further enhance response time and productivity.
Lampin is also making changes to their plant layout to accommodate the addition of two state-of-the-art machines ($1.3+ million), which will increase production capacity and shorten customer lead times. The company's employee-owners agreed to invest in the equipment after discussing the benefits of helping Lampin achieve its goals.
Lampin employee-owners continue to push themselves to improve by setting new goals. Recently, they vowed to learn PartMaker CNC software, which had been sitting in the office for several years. Of course, there is a learning curve and DiBenedetto as the president, has to allow people time to learn, knowing that it will ultimately benefit both individuals and company.
Lampin's growth strategy also includes investing in their future workforce. They suggest more manufacturers become involved with their local technical high schools and colleges to help ensure that students are learning what is actually being used in the industry today. In this way, graduates are more immediately employable and provide more value to local manufacturers. This kind of thinking – where the manufacturing community and the educational and training resources communicate about the capabilities that will be needed by the future workforce and get involved in curriculum and legislation to see that these needs are met – is championed by the MACWIC, Manufacturing Advancement Center Workforce Innovation Collaborative, of which DiBenedetto is a member.
"We have begun the SMART Goal process but still have a way to go in order to fully embrace it," said DiBenedetto. "It continues to be a challenge every day, but we are making progress. You can get caught up in growth and if you don't standardize processes then sustainment becomes an issue. We still need to initiate monthly review procedures to see how people are progressing toward their goals and keep them motivated. Everyone needs to be reminded that their goals are important and will help them be better at their job. Managers need to monitor, motivate, and thank people. This will take time but it is a proven practice that works."
Budlong added, "Lampin's continued success as a company and in transforming themselves toward being a "Lean Enterprise," is due to their own collective honesty, diligence, and hard work. They should be proud of what they have accomplished. I'm certain they will continue their success. Great people make great products."