The words "just-in-time manufacturing" might evoke
images of vast automotive assembly lines, but the principles that
revolutionized large-scale American manufacturing in the 1970s and
'80s are being applied on a smaller scale all over this
country.
One small business that has recently switched to the
just-in-time system is Gamblin Artist's Oil Colors, a small
oil-paint manufacturer in Portland, Oregon, owned and operated by
husband-and-wife team Martha and Robert Gamblin.
Robert Gamblin is a painter who began making and selling oil
paint more than 20 years ago, not long after graduating from the
San Francisco Art Institute. "It's a rare and fortunate
individual who is able to make a living by selling art," says
Robert. "There was a need for someone in this business to make
paint with the artist in mind."
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From a modest start in Robert's garage, producing just three
colors of paint, Gamblin Artist's Oil Colors now sells 87
colors of oil paint all over the United States and abroad, has 20
employees, and owns its own manufacturing facility. The paints cost
between $7 and $20 a tube. The Gamblins declined to state the
company's gross revenue.
As the company has grown, Martha, co-owner and general manager,
has taken steps to solve the problem of managing the increase in
paint production. "We started talking about making bigger and
bigger batches of paint," she says. "A 100-milliliter
tube of titanium white weighs one pound. Add that up, and it's
a [hefty] weight. When someone started talking about putting 400
pounds of paint on a rail above our heads, I knew I needed to talk
to an engineer."
Martha found that manufacturing consultants charge about $200 an
hour-a fee that a small business like Gamblin just couldn't
afford. After talking to the Portland Development Commission,
Martha found Charlie Martin, a manufacturing consultant for the
Oregon Manufacturing Extension Partnership (OMEP). Martin guided
the Gamblins through their transition from a traditional
manufacturing system to the newer, leaner, just-in-time model.
Martin's fee was just $65 an hour, a rate that is
subsidized, in roughly equal parts, by local, state and federal
funding. "If I were doing this privately, I couldn't
afford to work with most of them," says Martin, who advises
about six different small businesses at a time.
OMEP is part of the Manufacturing Extension Partnership (MEP), a
national network of not-for-profit centers organized in 1986 by the
National Institute for Standards and Technology. The program has
more than 400 centers around the country, at least one in every
state and territory, and it helps more than 20,000 small
manufacturing businesses a year. Most of these businesses, like the
Gamblins', have 50 or fewer employees. Eligibility for
participation in MEP varies by region. (Call 800-637-4634 for more
information.)
The Gamblins used to make colors in batches of 1,200 tubes of
paint at a time, which would remain on the shelves as inventory for
three to six months. "Old-style American manufacturing works
on a push system," notes Martha. "The whole system is
about putting a pig in a python-one huge bite that moves through
the shop."
Now the Gamblins make colors in smaller batches-about 500
tubes-and they focus on producing a single type of color at a time,
like different kinds of red all made on the same day. "Many
small businesses don't realize that we need a manufacturing
philosophy," says Martha. "We increase creativity and
flexibility by reducing variation."
After implementing new manufacturing strategies, the Gamblins
cut their inventory in half and freed up about $200,000 in cash,
which they'll use to invest in capital growth and launch their
first advertising campaign.
The equation is simple: less inventory means more cash-and cash
flow is king for any small business. "Each color turns twice
as fast. We're not putting three months of product on the
shelf," says Martha. "Now it's down to six weeks, so
our cash returns twice as fast."
The inventory change is just one of many the Gamblins have made
since they started working with Martin and the OMEP more than a
year ago. Quality control has also improved. "In each station,
we ask the question, ‘Am I making good stuff?' "
says Martha. "If the answer is no, the production process
stops. The manager is called, and there's 20 minutes to make a
decision. Adjust and fix, or pull. The decision gets made right at
the station."
Every week, the 10-person production crew aims to solve one
process problem as a team. Everyone is involved-from staff meetings
to conversations and problem-solving on the floor. "This
engages workers," says Martha. "They're not checking
their minds at the door. We have better jobs, better teams, better
management, and a better environment for personal growth."
Although Martha has experience in business and management, she
says she still found the lean manufacturing system
counter-intuitive at first. "We're well-educated people
with good common sense," she says, "and we couldn't
have done this without help."
Martin's guidance and the OMEP's help have made it
easier for the Gamblins to implement new procedures, but the
changes have not been easy for everyone to accept. "We start
looking at the shop floor as a system, and our goal is to improve
the function of the whole system. Instead of being hierarchical,
it's more of a team process," says Martin. "But not
everyone works in this environment well. You do lose a small
percentage. The shop-floor folks prefer it. The people who get
threatened tend to be first- and second-level managers-people who
have struggled their way up."
In fact, during the transition, the Gamblins lost two
employees-a supervisor and a key operator-who were not comfortable
with the changes. "It's traumatic," says Martha,
"but it's the price of change."
Jane Applegate is a syndicated columnist and the author
of 201 Great Ideas for Your Small Business. For
a free copy of her "Business Owner's Check Up," send
your name and address to Check Up, P.O. Box 768, Pelham NY 10803 or
e-mail it to info@sbtv.com. Sarah Prior contributed to this
report.