Posted December 21, 2007 Atlanta
Research News & Publications Office
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Assistance with lean training cuts cost and boosts sales
When Paul Hoppes, president of Seminole Marine, relocated his business from Florida to Cairo, Ga., in the mid-1990s, he employed 16 people to manufacture saltwater fishing boats in a 32,000-square-foot building. In his words, the company 'muddled along' until several small successes came their way. And then the Sept. 11 terrorist attacks happened.
"In my opinion, that event unleashed the spending power of the baby boomer. A lot of people decided it was time to do it - they felt their own mortality," observed Hoppes. "In the 12 months following 9/11, we had a 62 percent increase in sales."
In the years following 2001, Hoppes said the company experienced a string of 'wide open' 46 percent average annual growth. After breaking down the company's structure and rebuilding it several times, he realized that sort of growth simply could not continue forever and he needed help in developing a strategy to become more profitable.
"During that time, we were operating on tribal knowledge, simply surviving that incredible thrust of growth. We realized we had a lot of wasted motion, we didn't have good documentation, we didn't know exactly how things moved and we didn't know how many hundreds of miles a day our forklift was moving," he said.
Hoppes, who was already familiar with the environmental management services of Georgia Tech's Enterprise Innovation Institute (EII), called on the organization again for assistance in lean manufacturing, a process management philosophy derived mostly from the Toyota Production System and known for reducing wasted time and effort. John Stephens and Paul Todd, EII project managers, conducted a lean manufacturing seminar for Seminole Marine with 40 key players, including everyone from supervisors to shop floor associates.
At the workshop, participants learned the principles of lean manufacturing and how to apply them. During a series of simulations as a member of a production team, they applied lean concepts such as standardized work, visual signals, batch-size reduction and pull systems, among others. They also experienced how lean improves quality, reduces cycle time, improves delivery performance and reduces work-in-process.
"The seminar was absolutely fantastic; you could see the light bulb coming on as you watched them," recalled Hoppes. "Within an hour, you could see teamwork and cooperation that you had never seen before. That has been the single most dramatic thing that we've ever done as a company."
Since participating in the lean overview in 2005, Hoppes has added on to his facility, for a total of 150,000 square feet of manufacturing space. With more than a half mile from one end of the plant to the other, he conducted an analysis to determine how workers can be more efficient. While he notes that there is always room for improvement, he says that his workflow is efficient, work-in-process has been reduced and the company has better standards based on the new efficiencies.
Hoppes partially credits the lessons learned in the lean manufacturing seminar with helping Seminole Marine gain market share in a market that is currently down by 30 percent. The company primarily makes two platforms - center console boats and cabin boats ranging from 19 to 31 feet - priced at the upper mid-market level. In 2007, Seminole Marine produced 850 boats.
"When there are fewer buyers out there, you need to deliver a better product more efficiently and more timely. We continued a strong marketing campaign and got the best advice we could get from places like Georgia Tech," Hoppes said. "Companies that maintain that attitude will recover at five times the rate of companies that sit back and played it safe."
Not only has Seminole Marine not participated in a declining market, but it has thrived. Since implementing lean principles, the company has increased sales and productivity by 50 percent, increased profit by double digits, expanded the facility by 50 percent and has reduced setup and changeover times by 25 percent. Hoppes estimates that increased sales totaled $6 million and cost savings equated to $3 million.
Despite these impressive numbers, however, Hoppes said he is most proud of the advances the company has made with its employees. Seminole Marine, which offers medical benefits and 401Ks, is the third largest private employer in Grady County with 200 employees.
"When we moved to south Georgia, one of the intangibles we didn't anticipate was the quality of people available to us. They are what you make them. Before the lean seminar, I hadn't really thought about how important it is to have teamwork, good morale and people all pulling in the same direction," he said. "You have two assets in business - your customers and your employees. The rest of it is scrap metal, and the auctioneers can prove it to you if you doubt it."
Hoppes, who serves on the Industry Services Board for the Enterprise Innovation Institute, also stresses the correlation between a company's business associates and its success.
"Unless you're born with expertise in all areas, you need people like those at Georgia Tech on your team. They have seen the very best of manufacturers and stay on the cutting edge of the most advanced techniques," he said. "It's been a great benefit to us and it's integral to our success."
About Enterprise Innovation Institute:
The Georgia Tech Enterprise Innovation Institute helps companies, entrepreneurs, economic developers and communities improve their competitiveness through the application of science, technology and innovation. It is one of the most comprehensive university-based programs of business and industry assistance, technology commercialization and economic development in the nation.
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Writer: Nancy Fullbright