Grover Corp.
Strategies executed:
– Implemented lean manufacturing and ISO quality system principles to maximize efficiency, increase productivity, reduce lead times and lower costs.
– Took advantage of overseas opportunities to offer high-volume products to customers at competitive prices.
Since Stuart Banghart bought Grover Corp. 11 years ago, he has upgraded the company’s equipment, instituted lean manufacturing principles and taken advantage of off-shore business opportunities.
Executing these strategies helped the Milwaukee manufacturing company weather the the recent recession, Banghart said. Like many American manufacturers, Grover Corp. fared well in the late 1990s, but struggled just a few years later.
"2001 and 2002 were down years," Banghart said. "2001 was a big drop, and 2002 was flat at that level. 2003 was a modest improvement from ’02, and we’re expecting to have a very good year in ’04, which pretty much mirrors the general manufacturing economy."
Grover Corp., located at 2759 S. 28th St., manufactures compression and sealing piston rings for industrial markets and liquid cast polyurethane products, mostly targeted at hydraulic sealing applications.
Banghart began working to improve the company’s efficiency in the mid-1990s by working with the University of Wisconsin-Madison’s Center for Quick Response Manufacturing.
"The concepts of QRM are that speed through the shop is more important than large lot (size)," Banghart said. "By reducing lot size, by shortening the number of days in the shop, you can have a much shorter lead time and be more flexible in your manufacturing."
For about 10 years, trends in the manufacturing sector have been shifting toward reducing lot size, having shorter lead times, reducing costs and offering lower prices to customers, Banghart said.
To help the company adjust to those marketplace trends, Grover Corp. implemented the ISO 9000, QS-9000 and ISO 14001 quality systems during the 1990s. In 1998, the company established its own advanced production system, which is a combination of lean manufacturing and QRM principles, Banghart said.
"The implementation (of the ISO system) can be expensive, but within a couple of years, if you’re doing it right and believe in it, you’re reducing costs," Banghart said. "By 1999, we had a system in place for training on lean manufacturing principals. So, when the recession hit, we were continuing to reduce costs. Our productivity has improved by almost 30% over the last three years, which is what has kept us in business."
Improving the efficiency of a manufacturing operation means eliminating as much waste of time and materials as possible.
"We measure footsteps," Banghart said. "We don’t want to waste footsteps. So, we’ve moved the machines closer together. We’ve made sure that everything is labeled, so everything has a place and everything is in its place. And we want to make sure that place is within arm’s reach. So if a person is always using a 9/16-inch wrench, there’s literally a place within arm’s reach of where he uses it and it’s labeled 9/16.
"It’s so simple, but it takes a huge amount of time and planning. Every employee here gets 40 hours of training on these principles," Banghart said.
To reduce costs, Grover Corp. now orders some raw materials from overseas and also has some high-volume products manufactured in India. Low- and medium-volume manufacturing jobs are usually done in Milwaukee.
"We’re the low- to medium-volume guy," Banghart said. "So, now what we’ve got is a blend that says we’re still sourcing some raw materials from the United States, we are sourcing raw materials from Asia and we’re also sourcing some finished goods from Asia. We can now provide the entire range, where previously, the customer might have gone to a high-volume supplier for those high-volume parts.
"We’ve probably shifted some finished parts out (overseas), but not many. Mostly, I’m using it to expand our product offering to the customers. There are surely some parts that maybe we’re capable of making here, but for cost reasons they’re made in Asia. And that’s fine. What we have to do here is the more specialized, customized parts, and the commodity parts have to come from offshore. Where it works, we do it over there, and where it works, we do it over here," he said.
Banghart said he prefers to do business in India, even though costs in China are lower, because India provides a higher-quality product, has more experience in manufacturing and people there are easier to communicate with because they speak English.
Grover Corp. currently has about 50 employees after reducing 10 to 15 positions through attrition during the recession. Banghart said none of the job reductions resulted from outsourcing.
However, growth may be just around the corner.
We’ll have to be a much bigger company than we were in the past," Banghart said.
Each quarter, Grover Corp. conducts a planning review to determine which strategies the company needs to execute to remain successful. Banghart said skilled employees are the most important ingredient needed to execute those strategies and keep the company one step ahead of the changes in the manufacturing sector.
"You hire action oriented people," he said. "You hire people who are not willing to wait for something to happen to them and then figure out how to respond. You hire people who understand the importance of staying ahead of the curve and not letting events control them. The concept is change before you have to."
Communication is the key to keeping employees engaged in the company’s strategies, Banghart said.
"What the planning structure does is it keeps everybody understanding what their role is in the bigger picture and what everybody is doing and what they need to do to support their part, so that we’re all pulling in the same direction," he said.
Banghart said manufacturing will still have a place in the U.S. economy in the future, but manufacturers will have to adjust to changes in the marketplace and find ways to meet the demands of their customers.
"Manufacturers will probably end up supplying to customers a blend of locally manufactured parts and foreign-manufactured parts," he said. "We continue to be the most innovative country. We innovate products. We will continue to manufacture innovative products here. And the commodity stuff that can be made for lower cost offshore needs to go there."
May 28, 2004 Small Business Times, Milwaukee, WI
