Today I talked with Ricky Loar, plant manager at Grove City, Ohio-based Horton Emergency Vehicles, a made-to-order ambulance manufacturer that has undergone a lean transformation during the past 18 months. The shop used to resemble a kind of large custom garage--or, more precisely, a collection of garages that each had its own work practices.
Assemblers would order rough versions of various sheet metal components from the company’s internal fabrication department, which took a week to return that order. Technicians would start assembly, receive those components piecemeal, and manually cut holes and weld aluminum panels and other sheet metal and tubular components during the assembly process. From the initial order to final delivery, the entire order-to-cash cycle would be well more than 100 days.
Today, the company has it down to 68 days. And once an order is finalized and components are ready, plant workers can churn out about two trucks a week. When I talked with Loar today, he was getting ready for a dealer training session. The company has improved its manufacturing process; now it’s tackling front-office operations, including sales, order entry, engineering, purchasing, and customer service. The company literally has torn down walls between departments. When everyone collaborates, managers expect that order-to-cash cycle to shrink even more.
Some of Horton’s customers are private health systems, but some are government municipalities, which aren’t exactly thriving right now. But you wouldn’t know it at Horton. The made-to-order manufacturer is thriving in a market that’s struggling.
Just before talking to Loar, though, this Washington Post article appeared on my news feed. Apparently, U.S. manufacturing productivity gains may not be so impressive after all. In fact, those gains may have come thanks to global outsourcing. A part is made overseas then placed into an engineered assembly here; and that low-cost outsourced part has wound its way into the computations of government statisticians.