Lean pays off at Ariens

When faced with outsourcing a critical lawn tractor component to China, Ariens Co. (Brillion, WI) turned to lean manufacturing techniques that enabled producing the part at significant savings over outsourcing it overseas.

Employing about 900 people, Ariens traces its roots to the Great Depression when Henry and Steve Ariens began manufacturing rotary tillers in 1933. Today, the company operates a 378,000 ft^sup 2^ (35,154 m^sup 2^) paint and assembly plant and a 268,000 ft^sup 2^ (24,924 m^sup 2^) fabrication plant in Brillion, and also distributes its Stens line of consumable parts at a 100,000 ft^sup 2^ (9300 m^sup 2^) facility in Jasper, IN.

Since adopting a lean manufacturing philosophy a few years ago, privately held Ariens has dramatically improved its bottom line, trimmed debt, and lowered its inventory levels by more than 50%. Ariens' initial foray into lean activities started with training from the Wisconsin Manufacturing Extension Partnership in 1999, but company management credits its meeting with Simpler Consulting Inc.'s (Ottumwa, IA) George Koenigsaecker in 2001 as the beginning of its full immersion into lean manufacturing.

Ariens' financial turnaround began with its fiscal year 2001 after the manufacturer weathered a couple of tough years. "We really had to shift our business," recalls Daniel T. Ariens, president and CEO. "We were not profitable, and we needed a change. We looked for a formula to make us a better company, and that turned out to be implementing lean.

"What we did to get going was learn a lot about the process, and then hire a lot of good quality people who were eager to learn about lean and eager to implement it," Ariens adds. "We let them go, and they ran with it."

In addition, Ariens switched from marketing its lawn and snow removal machines through distributors and moved the company to using a dealer direct business model. This year, the company reorganized into three lean-oriented Value Streams, along its Consumer, Commercial, and Snow product lines. Ariens now employs an Ariens Production System (APS), which is based on lean manufacturing principles and patterned after the famed Toyota Production System model.

Outsourcing a key component to China became a possibility a couple of years ago when Ariens' purchasing department received a bid that potentially could save the company more than $275,000 annually. When faced with the prospect, Ariens employees decided to see if applying lean manufacturing techniques could help them produce a competitively priced part built at the company's Wisconsin manufacturing facilities.

The part was the spindle for one of its Gravely brand lawn tractor products. "In fact, some of the components of that spindle were already outsourced to China, but we were going to outsource the entire part and bring in a completely assembled spindle," notes Jeff Hebbard, vice president of consumer products. "The purchasing department had a wonderful savings. We said 'give us a crack at it.'"

In a week-long kaizen event, a cross-functional team including machinists, maintenance, supervisory, and manufacturing engineering employees in Brillion devised a new U-shaped spindle cell that could be operated by just one employee. The lean workcell contains an IEMCA barfeeder, a Hardinge lathe, a Dainichi F-30 used as a chucker, and a CNC Bridgeport vertical mill, according to Hebbard. "They had firm quotes in there, and they were ready to go," recalls Hebbard of the purchasing unit buying the spindles from China. "We're a small town, a Midwest, American company, and they had to have some heartburn doing that, but their job and directive is cost reduction as well, so they were excited about the opportunity."

Ariens' spindle assembly, which holds the lawnmower blade on the Gravely mower decks, consists of a housing, shaft, hub, spacer, bearing, and a snap ring. During the kaizen event, the Ariens workers also developed a new tool to eliminate grease dripping from the spindle housing that made for a difficult installation. "The team had a target of what they tried to accomplish, and they ended up with a 40% reduction in floor space," says Hebbard, noting that annual cost savings of the lean cell were about $330,500.

On its report, Ariens' kaizen team detailed various metrics including walking distance, part transport distance, part throughput, and volume per day, adds Hebbard, who was the company's VP of manufacturing before the recent reorganization. Since these spindles are used with all of the Gravely mower decks, the components are a very high-volume part for Ariens.

Compared to traditional batch manufacturing, where a single part is optimized on one line, the lean approach took several parts made all over the factory and combined them into one cell, Hebbard explains, which meant moving equipment. "We literally picked up equipment and moved it, painted some of it, put it back in place, rewired it, and had the cell running in less than one week. So the challenge is that you're taking a shared resource that maybe used to run 1000 different parts, and now you bring it over here and dedicate it to spindles.

"A lot of people will say lean is easy to say and hard to do," Hebbard states. "It's a real simple thing to describe, but it's hard for people immersed in their life of batch manufacturing to grasp that and say it's a good thing to do. That's something that we still struggle with."

The lean approach is similar to cellular manufacturing, but much more, notes Hebbard. "It is more than cellular manufacturing. It's not just creating a cell, it's also one-piece flow," he says. "We don't allow any more than one-piece flow, we only build to demand. Takt time, or the customer demand, means that we're going to build a spindle whenever a customer orders a tractor. We are not going to build them faster, we are not going to build them slower, and we will strive to build them defect-free, which we would do anyway."

Adopting lean philosophies can come slowly to many workers, and never happens without some resistance to change, Ariens' managers note. "An interesting phenomenon with this particular cell is that we had built several cells before this, but generally speaking, it was using lesser machines, more of our manual type equipment," says process manager Paul Leao. "In this particular cell, we took two of the best machines in the department and allocated them to the spindle cell. That was a culture shock for everybody at the department. This was really cutting into the heart and soul of the machine shop and the actual machines that were being dedicated to the cell."

"You took your live turret machine and dedicated it," Hebbard adds. "When you think of machinists, their nature is to want to use the best, most fancy machine you've got."

At the end of that kaizen event, Ariens' savings was greater than what would have been achieved by outsourcing spindles to China. Plus, the company gained the additional benefit of eliminating lead time involved with components purchased overseas. "Instead of 3-6 months of inventory sitting here, we had two hours of inventory sitting here," Hebbard says. "The lead time is in minutes as opposed to months. The spindle itself is an Ariens-engineered product, which therefore makes it subject to engineering changes. Anytime you change something you've got a pipeline that is 3-6 months long, you have all of that to deal with. Now if we want to make a change we can do it and flush the system, and move on to a new project."

Another aspect of keeping the parts in-house was if there were problems from any parts, like a cap that was outsourced to China, Ariens employees would have to re-work the parts. "We had thousands-4000-5000 of them-and we had to rework those caps in our machine shop. So, if you take all the stuff that got outsourced to China and it's wrong, you have to come in, hand it to the machinist, and say 'you've got to re-work all of these parts.'"

Holding kaizen events has helped Ariens' personnel to embrace the lean techniques that company managers say have been instrumental in its turnaround. In this past fiscal year, for example, Ariens held roughly 193 kaizen events, and Hebbard attributes Ariens' gains to its lean efforts. "There's a little bit more to the picture than that-a lot of good management and other things that happened. I preach all the time, every chance I get."

With the kaizen events, employees are empowered by having a say in how things are done. "Even with our kaizen events, we try to get people from the floor on the event, so they actually have a voice with the team," says Tim Mercer, lean manufacturing manager. "As long as we have open communication and you are giving them an opportunity to make things better, I think that really helps the whole process."

Hebbard also credits working with Simpler Consulting's John Grunfelder, Ariens' sensei, or teacher, with enabling the company to implement lean manufacturing to its fullest. "He feels like a stakeholder in the company," Hebbard says, "and he's been with us since day one, visiting us nearly every month since May 2001." Hebbard notes that hiring experienced lean managers, like Bob Bradford, now Ariens vice president, snow products, who was trained in the Toyota Production System, also was key to Ariens' lean manufacturing efforts.

Accepting lean thinking takes time, he adds. "It's on ongoing battle. It will never go away," Hebbard notes. "I'll say generally though throughout the company we have a fairly open operating environment. People are pretty easy to work with. The resistance you meet isn't bloody, it's not belligerent. It's resistance, but it's good people that care about the company, asking good questions, as opposed to other places I've been to where the resistance is of a different flavor.

"We still have a long way to go. I think one of the things that probably any good lean company does is, you always think you are just terrible. When I walk out in the shop I think, 'oh my gosh, are we bad.' You've got to look back two years in a row. Then you say, 'I guess we are better.' You're always looking to improve."

If Ariens' lean implementation continues on schedule, the company may apply for the prestigious Shingo Prize for Excellence in Manufacturing, which until recently managers didn't want to become a distraction for employees working toward their goals of continuous improvement. "We're looking at the possibility of applying next year," Dan Ariens says. "Part of the reason why we didn't want to do it this past year is that the true meaning of that award would be to just recognize the people that put in so much work to take us where we are. But beyond that, I really want to make sure we're spending all of our energy to continuously improve. I always think it's almost like when you get your picture on the cover of Sports Illustrated, then you go into a slump, so you don't want that. It's a bad omen.

"The spindle cell was a great example of how a kaizen event, done right in creating a cell and pulling out all the waste out of the process, just yielded a much better cost, and we were able to achieve a better cost than the pricing we had from China," Dan Ariens points out. "Now the challenge there is that we need to do that again and again-do the same kind of review, and re-do the kaizen and take some more waste out."