Steve Chambers

While most companies find Six Sigma an applicable philosophy to increase quality and eliminate process variation, Steve Chambers, vice president of operations at EMS Technologies, said his company needed something else. The communications equipment manufacturer implemented its own continuous improvement system in 2003 called BPI (Business Process Improvement).

“We decided early on that Six Sigma was probably not the right thing for us but that lean was the right solution,” said Chambers. “We picked the best of lean to increase outputs and eliminate waste and then used parts of Six Sigma to get rid of some variations in the remaining processes.”

EMS was developed 38 years ago with a strong engineering mindset that was counter to manufacturing’s focus on high-volume mass production. The company’s manufacturing and test methods evolved to enable product quality validation with a minimal amount of work. Chambers maintains the same operational methods today.

Moving parts
EMS designs and manufactures wireless, satellite, and defense solutions for broadband and mobile information users. The biggest accomplishment of the BPI system came from the company’s need to eliminate floor-storage of parts from raw inventory and in process. EMS’s products are long, skinny, and bulky, and they were taking up too much room in the 100,000-square-foot facility. Six employees and one production manager set up kanbans, reorganized the production line, and achieved a one-piece flow that saved the company space and money.

The events freed up 20,000 square feet, eliminating the need for 20% of the building. Prior to this change, the company had acquired a new business and was looking for open space. “We had been looking at renting another building, but we were able to incorporate the new business into the existing facility,” said Chambers. “That saved us $225,000 per year.”

The BPI system also affected the Cobra product line, one of EMS’s highest producers. The company’s large product portfolio means what goes out to the customer is a made-to-order end product. One of the company’s most popular products, the MultiBand Cobra, used high-mix flow lines that needed to be streamlined.

The company held three kaizen events focused on each of the areas that needed improvement: delivery of material from the stock room to the line, assembly, and product testing and packaging. “When we started, our output was 12 end-items a day per line,” said Chambers. “We went up to 24 a day. We doubled the output, and we did it in three weeks.”

Chambers said another accomplishment of those events was an increase in the product’s margins. The 20% margin the company started off with on the MultiBand Cobra product turned into 40%. There was also a substantial increase in revenue. “We were able to meet a peak demand by increasing our outputs, growing our revenue by about half a million dollars,” he said.

Putting it together
EMS alleviated some of the pressures of being a cyclical business by finding alternative ways to work with its business partners. When the company moved to a just-in-time inventory focus, Chambers said he needed to find the right vendors to begin the process.

“We had a few vendors we’d worked with for quite a while that we piloted a couple of programs on,” he said. “A few failed, so we looked regionally to find places we could get to in one day.”

The company’s internal systems were built around having significant inventory on hand, meaning the changes needed to be implemented in places the company hadn’t even considered. Instead of ordering mass releases of large quantities, smaller and more frequent shipments were required. These kinds of changes were just part of the company’s move to a modern system.

“There were a lot of system issues that we didn’t think about when we started down the path,” said Chambers. “It’s really just the way the manufacturing systems were geared in the old ERP world.”

EMS worked with a small number of contractors to work out the kinks of managing its big, bulky products in a more on-demand climate. Chambers said after finding the right vendors to support these changes, questions arose for the system side of things. He knew what kind of business partners he was looking for. The trick was finding them.

“You have to find the right partner with the right relationship who has the depth and breadth of the ability to carry the production capacity burden as well as the financial wherewithal to manage your particular inventories,” said Chambers. “We worked through our vendor transportation issues as well as system-side issues with three pilot vendors until we had what we wanted.”

Using his company as a tie between vendors has also benefited EMS in managing products with sub assemblies. In an effort to think outside of the box while tapping into vendor resources, EMS took two competing companies and made them part of a team.

“Two of our top vendors are competing with each other to come up with a new design concept to help us get some cost out of our product,” said Chambers. “It’s interesting to watch the dynamic of them working with us to help us solve our assembly problems.”

He said his company has committed to sharing the solutions so that, while one company will officially win the competition, neither company will lose. EMS will buy a significant amount from the primary vendor, but will also buy products from the secondary vendor. Only 30 days into the 90-day project, Chambers can already see the light at the end of the tunnel.

“We have already seen significant cost savings,” he said. “I think this kind of a process can be applied across our whole product line. We’re just getting the big cost savings now in preparation to attack all costs every day.”