Vermont Castings Goes Lean
The decision to move to lean manufacturing cannot be taken lightly. It’s a change that affects every aspect of a company’s business. It alters the culture, transforms relationships, and forever moves an operation into a different place.
That’s what AFS Corporate Member Vermont Castings (Randolph, Vermont) is experiencing. It’s been a successful transition, but for this facility, it’s only just begun.
“We are in the early stages of our lean journey,” said Jeffrey Nelb, vice president and general manager.
Vermont Castings, a subsidiary of Hearth & Home Technologies LLC (HHT), mostly produces cast iron parts for stoves and fireplace inserts, serving fuel sources of wood, pellet and gas. The stove components are cast with recycled brake drums and rotors at the green sand plant. HHT bought the 80,000-sq ft. Randolph facility on Oct. 1, 2014. It employs 85 and runs one shift on the melting side and two shifts on the finishing side. There’s also an enameling plant in nearby Bethel, Vermont, that coats the products in nine different colors of porcelain glass. Parts are then assembled in Halifax, Pennsylvania.
When HHT purchased Vermont Castings in 2014, it was clear the foundry needed a facelift. The external presentation and façade of the facility was tired and unwelcoming. Since the purchase, HHT has invested millions of dollars in improvements to the facility and equipment, offering a modern presentation to customers, the community and employees, whom the company refers to as members. Today, the facility has a new blue exterior, and the front office, lockers, restroom facilities and cafeteria have all been updated. Additionally, significant investments went towards new ventilation systems, safety enhancements, technological improvements and new lighting.
But more importantly, the operation has been altered.
The concept of lean manufacturing isn’t new to Vermont Castings. Before the HHT purchase, the facility had used some lean concepts to their benefit, but it wasn’t an integral part of the culture like it is today. Nelb credits HHT with giving the foundry the latitude and investments needed to service customers across the business.
“What’s nice about our lean culture is the company’s investment and support towards programs, events and training for our members” Nelb said. “It’s interesting to look at how far we’ve come.”
To make sure there’s consistent quality and delivery, Vermont Castings continues reaping the rewards of a lean manufacturing culture.
“Expert application of lean principles driving quality, flow and velocity are the whole culture of HHT. It absolutely has to be on-time, every time with delivery because the value proposition to our customer base is to have industry best order-to-delivery lead time,” Nelb said. “If you order from HHT, you’re going to get it almost immediately. That’s our business model and that’s why it transcends down to all of our manufacturing sites. Quality has to be at the forefront of that.”
Prior to 2015, Vermont Castings was struggling with multiple issues. The plant’s production schedule wasn’t based on what customers needed, but was simply about manufacturing as many components as possible. On-time performance was not as consistent, and the foundry was battling with how to manage its extra inventory.
Those problems have been resolved by the application of lean techniques. In all aspects of the business, Vermont Castings has made significant progress.
Weekly rapid continuous improvement events have given employees ownership of changes, which is a key part of lean manufacturing. If they have an idea, they help teach others how to make it a reality. Then there’s how much Vermont Castings actually produces. Instead of just producing, producing and producing parts, Vermont Castings now makes just what the next step in the HHT supply chain needs. Nothing more, nothing less.
The benefits to that are obvious.
By processing in smaller batches, there’s an immediate feedback on quality. Employees can take more ownership of what they’re doing, and if they see an issue with a casting, they are empowered to stop it from moving down the line. Employees went from doing a singular task to working in a cellular operation, where one individual is responsible for all the finishing operations on a single part.
“A lot of it’s done at all levels,” said tooling manager/manufacturing engineer Jeff Schein. “A lot of it has to be commitment from the top down.”
Another change signified just how challenging lean manufacturing can be. And, ultimately, how transformative.
Packing the Totes
Since the stoves are not actually assembled in Randolph, products must be sent out to a sister plant for final assembly before they reach the consumer. Two years ago, the facility put in place a system that tests every part of its operation.
In the past, Vermont Castings would simply load mixed parts into a crate without much thought of the order they would be taken out. The idea was to just get pieces into a box and out the door so they could be assembled into a stove. Doing business this way, however, was not efficient. It was classic batch manufacturing and generated large inventories.
Starting in the summer of 2016, Vermont Castings implemented a rigorous and detailed way of loading recyclable totes. Each tote would have the exact number of components for one stove. There would be no extra pieces, meaning every shipment had to include nothing but usable parts. One mistake, even a small one, means the stove cannot be completed, slowing down the assembly line and costing the company money.
“To do what we do requires 100% quality. Now you don’t have extra parts sitting in that tote,” Nelb said. “If you’ve got one bad one I’ll just get another out of the same tote. That’s not the case. Every part in that tote has to be perfect. That is a huge change for everybody, but it’s a change for the better.”
CHECK IT OUT: Photo gallery of Vermont Castings
Vermont Castings’ scrap rate sits below 1%, meaning most totes don’t have the issue with unusable parts, but getting the right pieces into totes is not the only challenge.
Part of the change in 2016 was also the order of packing. Pieces are now placed in the totes in the opposite order of how they will be taken out in Halifax. For example, if a stove door is the first item the assembly line needs to remove from the tote, it is the last that somebody at Vermont Castings will place.
This takes discipline and training. But the end result of increased efficiency is worth it.
“I remember the practical side of me thought how are we going to do this?” said quality and business process improvement manager Michael Hudson. “Now it’s normal.”
It’s also effective.
“Our quality continues to make leap frog improvements,” Nelb said. “Quality inspection is performed by the members processing or packaging parts, and we have a disciplined process to error-proof every customer report of dissatisfaction.”
The lean manufacturing and ability to change-over their molding machines quickly provides Vermont Castings with some capacity to seek work outside of HHT.
That makes up around 5-10% of their business and is mostly in kitchen and cookware.
“The OEM business is important because we treat every customer with the highest regard, and we offer a quality and delivery model that is world-class” Nelb said. “We’re happy to entertain more, but it has to be the right type of business.”
Vermont Castings also wants to be the right place for future workers and its community. Like other manufacturers, a concern for Vermont Castings is finding new workers. By upgrading and keeping the facility current, offering competitive compensation packages, including quarterly profit sharing, and investing in robotics and CNC technologies, the goal is to be an employer of choice in the area.
“I think there’s a lot of pride. There’s pride in our products,” value stream manager Bill Corey said. “When members see them displayed, it’s something that goes a long way towards: this is what I do for a living. I make a product that’s a high value product in people’s homes.”
The investments by the parent company have also included spending in energy efficiency. HHT invested $104,000 to upgrade the lighting to high efficiency LED fixtures and lighting controls, saving $20,000 in annual electric bills.
HHT also invested $460,000 to upgrade the compressed air system foundry members rely on to power the equipment used throughout the manufacturing process. Working with Efficiency Vermont, HHT installed three new air compressor units online and used two newer compressors from a sister plant in Kentucky.
“The new lights will transform the work environment to such an extent that even without the substantial cost savings, the impact on member morale and well-being justifies the cost,” Nelb said. “The incentives that Efficiency Vermont provided for both projects helped us make these improvements, but equally valuable was the expert advice they provided in helping us select qualified contractors and the right equipment and technology for our needs.”
Those upgrades will help Vermont Castings move into the future. It’s a future Nelb is eagerly anticipating.
“We’re on the front edge of the new era,” he said. “We’ll see it through.”
Click here to see this story as it appears in the July 2018 issue of Modern Casting