Six years after Rockwell Automation Inc. began looking for ways to eliminate waste and make the company more efficient, the savings added up to $180 million.

Some cost-cutting efforts came in small steps, said Ted Crandall, a senior vice president for the Milwaukee maker of factory automation equipment.

For example, the company quit mailing paper copies of order acknowledgments, a time-consuming process that cost thousands of dollars a year.

Rockwell's distributors were placing orders through the Internet and had no use for the paper copies that sometimes arrived in the mail too late to serve any purpose.

A company manager called six distributors and asked whether they wanted the paper documents, which simply acknowledged that they had placed orders. "They said, 'Frankly, no,' " Crandall recalled.

When Rockwell stopped the mailings: "Basically, we saved $65,000 a year in printing and mailing costs," Crandall said. "If we can get every one of our 22,000 employees thinking that way, that's a very powerful thing."

Crandall spoke at a "lean manufacturing" conference Friday at the Wyndham Milwaukee Center hotel. The conference attracted about 120 attendees, with most of them from Wisconsin and Illinois, but some from as far away as Utah.

Lean manufacturing generally means eliminating waste that inflates costs. Besides looking for ways to trim fat from the budget, it stresses preventive maintenance, quality improvement programs and a flexible workplace.

Rockwell had $4.4 billion in sales in 2003. It uses lean manufacturing to increase productivity and earnings.

"There is an incredible power" in controlling costs, Crandall said. It's more than just putting the brakes on inflation.

Through lean manufacturing, RB Royal Industries Inc. cut the time needed to introduce products from 109 days to 32. It reduced the time necessary to give price quotes on orders from 24 days to four.

The Fond du Lac company makes tubes, hoses and fittings for home building, recreation equipment and hundreds of other uses. It had about $16 million in sales in 2003 and has 135 employees.

It should never have taken 109 days to launch a new product, said Mark Westemeier, manager of quality and manufacturing.

"Our products are not that complicated," he said. "And by taking 24 days to quote an order, it was no wonder that we weren't getting some new business."

RB Royal Industries consolidated operations from three buildings into one new plant. Previously, the company was so strapped for space it had used a residential house for its sales and marketing departments.

RB Royal Industries pursued lean manufacturing aggressively, putting most of its employees through the training. The results were $221,000 in savings in 2003, according to Westemeier.

The company found ways to save hundreds of hours in time. Meetings that once lasted several hours, with little progress, are now down to 30 minutes and get results, Westemeier said.

Source: Milwaukee Journal Sentinel

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