Trex Company Attributes the Strong Second Quarter to Lean Six Sigma
Posted by: meikah | 30 July 2009 | 9:52 pm
Net sales for the second quarter of 2009 totaled $91.5 million compared to net sales of $95.0 million for the 2008 second quarter. The company reported net income of $7.4 million, or $0.49 per diluted share, for the 2009 second quarter compared to net income of $6.5 million, or $0.43 per diluted share, for the 2008 second quarter. The company’s adoption of FASB Staff Position No. APB 14-1 related to embedded interest on convertible debt resulted in $1.6 million and $1.4 million of non-cash interest expense in the second quarter of 2009 and 2008, respectively, reducing earnings per share by $0.11 and $0.09, respectively.
For the six months ended June 30, 2009, Trex Company reported net sales of $159.1 million compared to net sales of $214.5 million for the prior-year period. Net income for the 2009 six-month period totaled $4.3 million, or $0.28 per diluted share, compared to $13.9 million, or $0.93 per diluted share, for the 2008 six-month period. These results included $3.3 million and $2.7 million of non-cash interest expense in the first six months of 2009 and 2008, respectively, which reduced earnings per share by $0.22 and $0.18, respectively.
President and Chief Executive Officer Ronald W. Kaplan has this to say:
“Our unwavering focus on enhancing Trex’s operations continued to produce results. We continue to expand the use of Lean Six Sigma manufacturing techniques throughout every phase of Trex’s manufacturing process in both our Winchester and Fernley plants. The resulting improvements enabled us to raise gross margin by 220 basis points to 31.2% quarter over quarter despite lower levels of capacity utilization. Our operating cash flow for the second quarter was strong, and we continued to execute our cash management strategy extremely well. We believe we’ve weathered the economic downturn better than many of our competitors. Our cash balance at quarter-end increased to $46.4 million and we haven’t borrowed against our revolver for more than a year…”
Filed under: Lean Six Sigma, Manufacturing, Six Sigma, Six Sigma Organizations, Trex Company
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GE Pushes for Lean Manufacturing
Posted by: meikah | 24 May 2009 | 8:45 pm
Quality people are now looking at Lean manufacturing as one of the strategies that can help manufacturers ride the current storm.
An article on Charleston Business Journal says that American manufacturers can compete with cheaper and sometimes faster foreign companies.
Dan McDonnell, manager of GE’s lean initiative in the company’s transportation division, says, ““We absolutely can compete. It doesn’t matter that they have an unfair advantage. I really believe that lean is North America’s bridge to the future.
As an example of the value of lean manufacturing, McDonnell showed a piston pin created for locomotives built by GE’s transportation division.
Producing the pin before lean manufacturing costs the company $107 per pin. The best quote for the same pin from China was $59. After implementing “kaizen†— a waste-reduction, continuous improvement philosophy that’s the foundation for lean manufacturing — GE produced the pin for $69.
Filed under: GE, Lean, Lean Manufacturing, Manufacturing, Six Sigma, Six Sigma Organizations
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MPS, a Step to Lean Six Sigma Journey
Posted by: meikah | 19 April 2009 | 8:09 pm
MPS or Managed Print Services according to Ken Steward of Change Forge is a management technique that involves three steps:
- Consolidation – consolidate resources to be able to manage them easily
- Standardization – look for that common ground to create a unified procedure across the enterprise
- Governance – hold people accountable for their actions and ensure results
After taking these three steps, you are now ready to embark on your Lean Six Sigma journey. These prepare you for the task of streamlining platform support and production techniques. As Steward said, these are not new concepts and people in management have probably known this, but they just needed to be educated about it more.
Steward was able to roll out Lean Six Sigma after he underwent the three steps of MPS.
Have you tried it?
Filed under: Lean Six Sigma, Manufacturing, Processes, Productivity, Services
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Peavey Electronics Corporation Embarks on a Lean Journey
Posted by: meikah | 12 April 2009 | 7:48 pm
Peavey Electronics, manufacturer of musical equipment, gear, and accessories among others, is going into Lean Manufacturing.
The goal: to maximize efficiency among its 33 facilities and strengthen the organization’s position in the global marketplace.
According to Courtland Gray, Chief Operating Officer of Peavey Electronics:
“By embracing Lean practices, we can better understand the flow of production from plant to plant and come up with more efficient ways of doing business. Our goals are to apply skills efficiently, deploy freed resources where needed, and ultimately become more competitive. Peavey is committing to making a significant upward stride in performance in a short period of time, and that will benefit our customers, employees and community.”
It’s good to know that companies such as Peavey believes in lean principles. Indeed, lean and other quality initiatives can be applied to any kind of business whose aim is to improve its processes for a more efficient business model.
Filed under: Electronics, General, Lean Manufacturing, Manufacturing, Peavey Electronics, Processes
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Carrier Shares Six Sigma with Customers
Posted by: meikah | 12 April 2009 | 7:19 pm
Carrier, the world leader in air conditioning, heating, and refrigeration systems, is sharing its Six Sigma knowledge with its customers.
Last week, for instance, the company went to Exeter, NH to work through a Lean, Six Sigma process with TradeWinds Mechanical Services.
John Stiene, Northeast regional operations manager for Carrier, describes this undertaking as:
“It’s about processes and communications. It’s not about spending more money to make improvements. It’s about discerning what your customers want and therefore are willing to pay for, as well as the processes you, as a business, require. The end goal for this training process is to shorten the time it takes to quote a job from 2-3 days down to 24 hours, which is what TradeWinds’ customers want.”
To share Six Sigma with your customers is a good idea, actually. It ensures that you and your customers are on the same page, sharing the same or even a similar business outlook and goals.
Filed under: Carrier, Manufacturing, Six Sigma
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Quality People See Six Sigma as a Preventive Strategy
Posted by: meikah | 4 March 2009 | 11:14 pm
Quality man, Jim Smith shares his thoughts on what manufacturers should do in the face of mounting economic crisis, and how these organizations can put up a preventive strategy that help them satisfy their customers, and see their business through.
Here are his thoughts:
- Companies return to the basics, and get back to the rigors of doing the right thing at the right time for the right reason. Process excellence is about rigor and discipline in execution and not about compromising product integrity.
- Companies strive for strength and quality product and process design, followed by stringent validation of those designs before implementation takes place. There are far too many products being rushed to market before they have been fully validated. This causes too many engineering changes required to correct design issues after the product has been released for manufacturing. These changes drive costs upward, cut profit margins and have the potential to further complicate quality problems.
- Business leaders have to give serious consideration to having design engineers be members of ASQ, and be certified as quality and reliability engineers as well as Six Sigma Black Belts.
- We must stop “firefighting†and design “fire-resistant†products and processes. Success is found by knowing what the goal is, how to get there, and executing with rigor and discipline. We need to become proactive in preventive measures, and stop being so reactionary. Reducing the number of engineering changes to correct product problems could be the next approach to becoming lean.
Source:
Face of Quality: Where Do We Go From Here?
Filed under: Manufacturing, Quality, Six Sigma
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Mosaic Company Benefits from Lean Six Sigma and Wins an Award
Posted by: meikah | 2 March 2009 | 9:28 pm
In a press release, The Mosaic Company, the world’s largest phosphate fertilizer producer, won the Top Award for Best Process Improvement Project Completed in 90-Days at the recent IQPC Lean Six Sigma and Process Excellence Summit held in Orlando, Florida.
Mosaic has been invested in Lean Six Sigma since its founding in 2004 when Cargill and International Minerals Corporation merged operations. However, Mosaic has taken a different approach to continuous improvement by deploying an innovative, “hybrid” version of Lean Six Sigma that leverages a small staff of Black Belts trained in advanced data analysis tools with a 60-day Rapid Action Team Process that taps the knowledge and creativity of frontline workers.
In 2008 alone Mosaic used this Rapid Lean Six Sigma approach to deploy more than 45 teams, engage over 500 employees and deliver close to $25 million in financial benefits to the company’s bottom line.
Filed under: Awards, IQPC, Lean Six Sigma, Manufacturing, Six Sigma, Six Sigma Organizations
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SixSig Reference Feature: Adaptive Manufacturing, Enabling the Lean Six Sigma Enterprise
Posted by: meikah | 8 February 2009 | 5:28 pm
As manufacturing continues to become a commodity within the value chain, manufacturers are constantly challenged to create efficiencies that drive down product costs. This makes lean manufacturing more important than ever before – because lean manufacturing eliminates waste and minimizes process costs.
Only the SAP® Manufacturing solution gives you the adaptability you need to successfully combine lean manufacturing principles with those of Six Sigma.
Filed under: Lean Six Sigma, Manufacturing, Six Sigma, Supply Chain
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Innovation of the Week: Embedding Innovation at Whirlpool
Posted by: meikah | 29 January 2009 | 9:18 pm
Whirlpool has been a trusted brand for household appliances for years now. And the reason for its stay in the business is innovation.
Nancy Snyder has been credited for most of the innovative efforts that Whirlpool have been taking. Under Ms. Snyder, the company took into a bold yet successful initiative.
In an interview with Terry Waghorn for Forbes.com, Ms. Synder reveals how she did it, and how Whirlpool embraced the “embedding innovation.” Some insights from the interview:
- First, Jeff Fettig, Whirlpool’s chairman, made a company-wide announcement that encouraged every employee to submit their innovative ideas.
- Second, created innovation teams, who had to prove their idea on three accounts: benefit the customer; have that competitive advantage and return value to the shareholders, and able to move into the innovation pipeline.
- Third, create software tools to help teams collaborate virtually and publish their work across the organization.
- Fourth, establish an “I-Mentors” team who helps facilitate the innovation cycle throughout the company.
- Fifth, despite the economic recession, Whirlpool is focused not only on reducing cost, but also on the long-term impact of innovation.
Ms. Snyder co-authored a book titled, Unleashing Innovation: How Whirlpool Transformed an Industry. There are more insights on innovation there.
Click here for an overview of the book.
Filed under: Innovation, Innovation Update, Manufacturing, Whirlpool
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A Modern Parable
Posted by: meikah | 27 January 2009 | 10:00 pm
I got this from the email, and I thought of sharing it here. The story has a ring of truth. What do you think?
A Japanese company ( Toyota ) and an American company (Ford Motors) decided to have a canoe race on the Missouri River . Both teams practiced long and hard to reach their peak performance before the race.
On the big day, the Japanese won by a mile.
The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.
Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing.
Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion.
They advised, of course, that too many people were steering the boat, while not enough people were rowing.
Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team’s management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.
They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder. It was called the ‘Rowing Team Quality First Program,’ with meetings, dinners and free pens for the rowers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The pension program was trimmed to ‘equal the competition’ and some of the resultant savings were channeled into morale-boosting programs and teamwork posters.
The next year the Japanese won by two miles.
Humiliated, the American management laid off one rower, halted development of a new canoe, sold all the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.
The next year, try as he might, the lone designated rower was unable to even finish the race (having no paddles), so he was laid off for unacceptable performance, all canoe equipment was sold and the next year’s racing team was out-sourced to India.
Sadly, the End.
Here’s something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can’t make money paying American wages.
TOYOTA has spent the last thirty years building more than a dozen plants inside the US . The last quarter’s results:
TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.
Ford folks are still scratching their heads, and collecting bonuses…
IF THIS WEREN’T SO TRUE IT MIGHT BE FUNNY
