Earlier this week I had the opportunity to partake of my favorite activity, actually visiting a manufacturing facility with a unique value proposition. This facility is demonstrating leading-edge techniques for both lean and flexible manufacturing in an area not necessarily known for practicing these advanced techniques. What made this experience so unique was that the facility is located in Massachusetts, not necessarily known as being a hub of high volume manufacturing.

My visit was to ETM Manufacturing, a custom metal enclosure design and fabrication producer that caters to computing, telecommunications and other industry related manufacturers.  ETM’s CEO, Rob Olney invited me to visit and I was quite impressed with both the business he has developed as well the as management philosophies that this CEO practices.

ETM recently moved to far larger quarters in Littleton Massachusetts to accommodate increasing volume and future expansion needs.  ETM caters to low volume-high mix, custom manufacturing needs. The facility itself has a work center layout involving flat sheet metal in one door and finished product from another door.  Production specialists are cross-trained to support multiple work centers and to flex with day-to-day production volume needs. What visually strikes anyone visiting is the lack of any excess inventory staged anywhere within the facility. Production orders are scheduled in weekly increments and ETM boasts the ability to move from product design to metal products within 4 weeks.

Rob Olney is a visionary CEO with a lot of experience in both contract manufacturing and other manufacturing-oriented environments.  He has built a business model that allows ETM to be able to serve multiple industry needs for metal enclosures, while also providing buffers to any one industry’s business or ordering cycle. As an example, the facility can be producing metal enclosures for a customer who manufacturers medical electronics and also be producing surgical trays for the healthcare industry. Rob is an avid believer in lean manufacturing and compressing the supply chain barriers for his customers.  As an example, transportation is often an expensive component for the movement of metal enclosures.  Rob and his team actively work with manufacturing customers to find more cost affordable means for moving product, including an in-house transportation capability.

From my conversation with Rob over lunch, it was easy to discern his passions for lean manufacturing and ways to compress the supply chain for his customers.  Rob also finds the time to be a blogger on the company’s web site.  To get a true sense of ETM’s customer responsiveness, readers are welcomed to review a representative blog posting, Gary to the Rescue.  One gets the sense that being responsive to a customer’s unique needs should always be valued along with praising employees for going the extra mile.

If any of our reading audience has unique needs for metal enclosures or metal fabrication, it may be worth your effort to speak with ETM Manufacturing.

Bob Ferrari

Disclosure: The author of this commentary has no current financial or consulting interests in ETM Manufacturing.

A ran across a blog post on BNET penned by Jim Henry that stated that BMW is betting that Flexible manufacturing, not Lean is the next big thing in auto manufacturing.  The article quotes Rich Morris, a vice president at BMW’s U.S. operations as noting that “everyone has to become more flexible.“  Flexibility was defined as both the ability to shift production of different models among different plants as demand shifts among different global markets.  It can also manifest itself as building different models of autos within the same plant. This is somewhat different than designing overall manufacturing capability on the basis of pure Lean methodologies, where complete efficiency becomes the overriding goal. There is also a hybrid combination model, similar to Toyota that attempts to build and distribute vehicles in the leanest plants, but in the fastest cycle-time to customer orders.

This type of argument comes up frequently and can sometimes take many views, depending on a supply chain professional’s built-in bias or training.  In the case of BMW, the context is defined as the overall need of customers.   Morris indicates that “in 2008, 70 percent of (BMW) production was built to customer order.” The alternative, which many other auto manufacturers practice is to schedule production based on dealers’ orders, which is their best forecast as to what customers may buy, or I might add, which options can be the most profitable for dealers. The disadvantage is duly noted, that being that the customer has to often compromise his or her needs to what may be available for sale.

My view is similar to BMW in that any production or supply chain model has to have its first priority focused on the needs of the overall customer.  Because BMW is a premium brand that differentiates on performance and features of its vehicles, flexibility makes sense.  BMW vehicles are very expensive, hence having many unsold finished vehicles in inventory is not efficient.  Contrast this approach with the recent market introduction by Tata of the Nano automobile in India.  Here, the vehicle has been designed with very limited options and marketed to a very cost-sensitive, entry-level consumer. Tata elected to go with a highly lean and efficient manufacturing process focused on vehicle sub-assembles, which are shipped to actual dealers who assemble the final car configuration based on a consumer order. 

Ford Motor Company has recently rolled out a flexible manufacturing strategy for its newer U.S. operations, while Honda can build its Accord sedan in a existing truck plant with little interruption.

 Which model provides the most value?

I believe that if customer need and some degree of efficiency is the goal, Than BMW is correct, everyone has to become more flexible in production capability.

 Bob Ferrari