Just ask Grand Rapids-based Micron Manufacturing Co.
About a decade ago, the company initiated a strong lean manufacturing culture that culminated with it winning the highly coveted Shingo Silver Medallion in 2009. But about that time, the manufacturing industry hit bottom.
Even though the manufacturer of precision machined products for the automotive, aerospace, furniture industry and other industries was already very lean in its operations, it felt the sting of the general industry slowdown, and employment shrunk to 32 employees from a high of 47 people in the mid-1990s.
“In 2009, the world was coming to an end for all manufacturers,” said Dan Vermeesch, Micron’s plant manager. “We realized then that (it was) the time to invest. When companies were circling the wagons and not spending money, that’s when we decided to do it.”
That Micron bucked the industry trend and invested in its plant, equipment and technology in the past three years comes as no surprise to those who’ve tracked the company over the years.
It’s that contrarian philosophy that has led to the company’s success over its 60-year history, said Mike Preston, the company’s owner and general manager.
“We do a lot of things outside the norm,” he said. “That distinguishes us, and I know that’s why we have the business we do and why we continue to grow our business.”
Thanks to an aggressive investment strategy that saw the company invest more than $1 million over the last two years in equipment and technology to help improve quality and capabilities, the company’s sales rebounded to pre-2009 levels with a staff of 34 people, Preston said.
That the company does more business today than it did with its peak headcount speaks volumes about its strong emphasis on operating in a lean manufacturing culture, Vermeesch said.
Micron added two new machines, new software, technology to link its machines with its server and a new vision inspection machine to measure finished parts, as well as upgraded the environment on its production floor.
The prospects for next year show the company should at least equal its performance in 2012, he said.
“If we didn’t (invest), we wouldn’t be where we are today,” Preston said.
Micron’s performance tracks with the industry’s trajectory. The Precision Metal Products Association’s index of sales last year was 114, which surpassed the annual average of 105 in 2008. The index is benchmarked to a score of 100 from the year 2000.
Year to date, shipments rose just 2 percent through September, according to PMPA’s Business Intelligence Report from late October. The association reported a combination of “regular causes” (a stagnation of the general economy) and “special causes” (the national elections and the fiscal cliff) were suppressing orders after a strong first half of the year.
Those results were “discouraging to our forecast of industry sales for our precision machining industry increasing 7-8 percent by year end,” Miles Free, PMPA’s director of industry research and technology, stated in the report. “Savvy managers will be investing incrementally in training and workforce flexibility rather than capital equipment given these numbers.”
Luckily for Micron, it’s been investing in its workforce for a number of years, said Vermeesch and Preston. The company’s focus was twofold. It linked with the West Michigan Strategic Alliance to develop an internship program to improve the talent pipeline into the company, as well as dedicated resources to train existing employees.
“The word’s finally out that manufacturing is not dead and that it’s a good profession to be in,” Preston said.
One of Micron’s employees who was a former school teacher took the lead on developing plant-wide training programs, particularly in CAD, Vermeesch said.
“To have a school teacher at the head of our training program (is unusual),” he said. “But we have a lot of those types of things where we’re outside of the industry norms.”
Another norm-breaking practice: On the plant floor, the company has no defined supervisors. All employees are expected to be self-managed and versed in every aspect of production, with personal goals tied to the company’s strategic plan, which is updated once a quarter.
That lean management structure requires that the company pay attention to hiring the right people to work on the floor, or as Vermeesch describes it, “making sure we have the right person on the bus and in the right seat on the bus.” Every employee at Micron goes through a “predictive index” analysis to ensure the people have the right skills needed to work in the company’s environment, he said.
Micron’s goal, he added, is to have a balance of personalities and skill sets.
The focus on education and training is key to Micron’s future prospects as the industry becomes increasingly technical in nature, Vermeesch said.
“There’s a heavy emphasis on growing young, new talent to support all this equipment,” he said.
To attract that talent, the company realized that it needed to invest in making an attractive environment for employees to work. That led Micron to totally redo its production floor. It removed all the equipment and started fresh from the floor all the way to the white ceiling, and added new lighting.
That move paid off immeasurably, Preston said. Not only did the employees appreciate the bright milieu, but the refreshed plant came to serve as a “showroom” for the company’s capabilities on the many tours it gives, he said.
“The people who work here have a great environment, but it also shows well when we bring customers through,” Preston said. “If we can get them to our plant, the plant and the people sell itself.”
Plant tours have even become a key part of the company’s business development process. Since winning the Shingo Silver Medallion Prize, the company hosted more than 50 tours, often in conjunction with the Michigan Lean Consortium, resulting in more than 1,000 people coming through Micron’s plant.
Some of those tours have led to new business. One of the new machines the company just added helped Micron break into the medical device industry for a customer that first came to the plant on a tour with the consortium, Vermeesch said.
In another case, the plant helped sell the company’s attention to detail and lean operations, he said. Micron, which only did a small amount of business with the particular customer, found itself on the cut list as the customer was planning to consolidate its supply chain. After a tour, Micron not only kept the business, but took over production from other suppliers, Vermeesch said.
“It really took a 180 once we got the customer in to see our systems,” he said.