BHMT produces drill bits for blasthole drilling as well as raised boring and related drilling for the mining industry. Though they held over 35% of their market, they were in need of change. Customers' requirements were changing quicker than BHMT could react. They had the need to rapidly respond to the ever-changing business environment in order to better serve their customer's needs and maintain market share. With the help of ARRI's small business group Lee Comley, Plant Manager, and Bob Thomas, VP/GM, were challenged to implement these new ideas. Comley stated, "that many of the concepts learned in college and read about in journals were supported by the BWS."

Benchmarking for ideas

One of the greatest benefits of the BWS is the opportunity to network with other local companies facing similar challenges. "We started talking to people," says Comley. They found that other companies attending the BWS had experienced similar constraints and had implemented cellular manufacturing as a solution. Cellular manufacturing is a form of production that groups machines, tooling, people, and materials into manufacturing cells. Each cell produces a family of similar parts, with all parts in the family having nearly the same traits, machines set-ups, and machine routines. Several companies in the BWS had bench-marked with Pratt & Whitney, an aircraft engine manufacturer. BHMT made the necessary contacts at Pratt & Whitney to bench-mark their operations. "After our visit to Pratt & Whitney and the validation by the BWS, we determined that cells were the way to go," says Comley.

Company transforms

In December of 1994, a cross-functional team was formed of shop employees, managers and engineers to design and implement a pilot cell. "After working out the details, we moved all the equipment over a weekend. The plan was to miss no production. It was a truly an amazing process to watch the excitement people had in implementing change in the shop," says Comley, "And no orders were missed on Monday morning".

The pilot cell was so successful that BHMT decided to restructure the entire shop into a cellular layout. The actual move was performed in phases due to the need for additional equipment necessary to have three fully functional, self-sufficient cells.

Teams step up to the plate

During the first six months of 1995, in preparation of the shop reorganization, "we trained everyone to be a functional member of a self-directed team "says Comley. Every employee became a team member and learned to support each other as well as other teams. The training was conducted with their sister division in Houston to improve communication and teamwork between company divisions in order to enhance sharing of best practices. "That was the best money we ever invested," recalls Comley. "Now we are almost a seamless organization." The teams designed their work cells with little guidance from management. By the summer of 1995, the entire shop was working as teams in cells. Management's role changed as well. Support staff was assigned to specific cells. Supervisors attended training to become coaches. Coaches became responsible for guiding teams and providing resources. Responsibilities once handled by a supervisor are not performed in the team structure. The cell structure allows the team to control many operations that were once controlled by management. These include the scheduling of product through the cell, scheduling vacation and overtime, control of budgets and ordering supplies, as well as others.

Total Quality Management provides the structure for BHMT to operate in the team environment. The Quality Steering Committee (QSC) is comprised of senior management and responsible for the overall direction of the organization. The Quality Management Teams (QMT) conducts business at the department level while Cell Quality Teams (CQT) support the shop floor. Each team reports to the level above. Each level has specific objectives to pursue which support the objectives for the level above. All support the BHMT objectives. Performance to these objectives is reviewed quarterly.

Bottom line impact

Results? BHMT has plenty. Due to inefficiencies, headcount grew from the 1993 level by 30%. After implementing the cellular process and continuous improvement efforts, headcount was reduced to near the 1993 level. The decrease was achieved by eliminating non-value-added activities and attrition. As a result implementing cells, BHMT did not proceed with a planned expansion. Instead of adding 15,000 square feet to their facility, they cleared out 12,000 square feet for a new production line. The implementation of cells has dramatically impacted the plant's performance. Compared to 1993, BHMT reduced cycle time by 80% on average. The average set-up time has been reduced by 70% and work-in-process decreased by 78%.

The introduction of cells is not the only source of improvement. Cross-functional teams have also contributed to the bottom line. Engineering now works directly with the shop floor as well as in the field. Each cell has an engineer assigned to it so that when a problem arises, everyone knows who to contact. Engineering problems are now resolved much faster and downtime has greatly decreased. Engineers are also assigned to geographic regions around the world. The engineers work directly with the sales force and the customer to design new products and to enhance productivity of existing products. The process of concurrent engineering is used when new products are designed. This helps to speed up new product introduction and involves engineering, marketing and manufacturing from the onset. By utilizing this method, new product development cycle times have been reduced by 40% on average. The result of all this is the ability to respond quicker to customer's changing requirements. All employees are now customer focused.

Comley's advice

For those interested in cellular manufacturing, Comley offers the following advice: "There is not a cookbook approach. You must benchmark with people who have experienced real change and learned from that experience. Be willing to take risks and if you flounder, regroup and start over again. Success is only a step away." To find people with answers, Comley turned to the ARRI. "Our journey started with the Enterprise Excellence and it was well worth our investment and time."