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'Lean' Factory Home Building Boosts Market Share
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The Shelter Systems plant in Westminster, Md. uses just-in-time manufacturing. |
By Susan Conbere, D&R International
Since 2005, Building Systems Councils member and Partnership for Advancing Technology in Housing (PATH) partner Shelter Systems has been using just-in-time manufacturing associated with Japanese car companies to streamline its production processes for engineered wood products and roof and floor trusses. The result has been flexible scheduling — the ability to deliver orders to customers when they need them, and not a day (or maybe even an hour) before.
The essence of lean manufacturing is eliminating all forms of waste — from materials to time. For Shelter Systems, the new approach has been highly cost-effective. Labor is used more efficiently, employees are more satisfied in their jobs and expensive inventory isn’t sitting around. Lean manufacturing also yields a higher-quality product, since lumber and other materials don’t sit out in the weather waiting to be used.
It takes a visionary company to commit to the painstaking process of designing a plant to handle materials so efficiently. Vice President Joe Hikel talked with PATH about the two-year process of building a plant in Westminster, Md.
Shelter Systems had been in business for 28 years when it decided to expand to accommodate growing demand. How to expand was the question. Hikel and his father, Dwight, observed operations in 25 other truss plants around the country and abroad. Although they gathered a lot of good ideas, they found that most growing companies simply build additions. But Hikel was studying Toyota’s use of lean manufacturing in an MBA program; he knew that just adding on wouldn’t yield the return on investment he wanted.
Having looked outside without finding a solution, Hikel turned inward, delegating a group of 15 of the company’s manufacturing team leaders to design a new process. Knowing intimately exactly how the plant worked, they began to develop plans for a more efficient facility.
As the deliberations proceeded, the company started to see a shift away from its top-down management structure. In addition to the 15 employees who were designing the plant, another 15 were asked to design the office, creating a new feeling of ownership and job satisfaction among them.
After two years of meetings, Hikel hired a design-build general contractor to put the plant together.
Shortening the Distance of Moving Materials
“Other plants are constrained by their buildings,” says Hikel. “We built the building around the process. The driver was reduction in cycle time: shorten the distance that material moves to make it move faster, which would help us respond to our customers more quickly.”
In the plant, lumber moves in only one direction, traveling in straight lines. Lumber from a specially designed storage system travels from saw to assembly, out the door and on to a delivery truck without ever crossing a different job. Since ceilings in the plant are 35 feet high, lumber can be stacked much higher, placing 80% of all the lumber no more than 25 feet from the saw that cuts it. This maximizes storage space and minimizes travel time — for people and wood. At its peak, the system has been able to attain through-put rates of more than 5,000 sticks of lumber per shift.
“In this business, cycle time is typically two to three days and the lead time is weeks,” says Hikel. “It only takes us five hours to build a truckload of trusses for a townhouse, house or apartment building.”
The system saves the company about 5% of sales in labor costs. “If your employees are picking up a piece of wood 15 times rather than three times, that’s waste,” he says.
Waiting Until the Client Is Ready
Because products can be manufactured with such short turnaround, the company can respond unusually quickly to customers’ erratic schedules.
“Since job-site conditions are always changing, we wait until the client is ready. That means we wait until the last minute to build our trusses. We don’t have products lying around the plant or in the yard; once they’re finished, they’re delivered. We’re getting the product there within one day or even hours of the time it needs to be used. The builder also doesn’t have to have my products sitting out on the job site in the weather. He’s getting a hot-off-the-press product.”
The biggest challenge for Hikel was convincing customers that he could deliver products just in time.
“At first, people couldn’t believe it. But our market share has increased — even though the building industry is down — because we do what we say we can do.”
Hikel offers the following advice to other manufacturers who might be considering lean: “Take your time. Focus on the cycle time. Focus on the customer. Include your team.”
Manufacturers can learn more about lean manufacturing from a recent PATH report, “Applying Lean to Factory Home Building.” Although the topic is manufactured housing, the same principles apply to other kinds of manufacturing.
Susan Conbere is a writer/editor with D&R International, a contractor for PATH. D&R is based in Silver Spring, Md. She can be reached at 301-588-9387.
For more information about building systems resources from NAHB, e-mail Tony Gacek at NAHB, or call him at 800-368-5242 x8357.
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Shelter Systems |
 Systems-Built Homes: Get the Big Picture
Attend the 2008 Building Systems Councils Modular & Panel Plant Tour May 18-20 in Harrisburg, Penn.
Participants will tour several of the top modular factories, getting an insider’s look at the manufacturing process as well as an opportunity to make important contacts.
For more information, visit www.nahb.org/planttour.
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