Reliability and Customer Focus at the Foundation of Resilience
We’ve made no secret of the gravity with which we approach our customer commitments. From needs-based innovation to on-time delivery to our 3-year warranty, our processes and culture are built around a laser focus on serving customers reliably. We don’t always name our approach, but if we had to, we’d have to call it agile manufacturing.
“Agile manufacturing is a manufacturing methodology that places an extremely strong focus on rapid response to the customer – turning speed and agility into a key competitive advantage. It represents a very interesting approach to developing a competitive advantage in today’s fast-moving marketplace. An agile company is in a much better position to take advantage of short windows of opportunity and fast changes in customer demand.” ~ leanproduction.com
Why are we bringing it up now? Because it’s never been more thoroughly tested than it has been this year. With high demand, a constrained and pricey supply chain, and ongoing labor shortages, our version of agile manufacturing has enabled us to remain at the top of the field in terms of keeping the promises we make to our customers and ourselves. We thought it might be interesting to share a bit more of the story.
What Agile Manufacturing Means to Us
Let’s be clear – this story is not one of perfection. It’s about doing what it takes with integrity, urgency, and empathy. We’ve been able to adapt to the challenges because that deep commitment to our customers is baked into all of our processes already. And commitment isn’t just about what we say we’ll do – it’s about what we actually do. So for us, agile manufacturing means less friction, more hustle, and real data. Let’s talk about how that has played out so far this year.
Challenges: Stress Testing the System
Time and Money: So what are we dealing with? It’s all over the news. The supply chain is backed up. Raw material prices are soaring, and lead times are too. How does that impact us? It’s only time and money. For example, the time it takes to track down late parts has skyrocketed by a factor of four-to-eight-fold, so what normally takes just minutes a day now takes hours. And the cost of raw materials to produce a fan has increased by 150 percent this year. These challenges are the real deal.
Talent: Similarly, talent is also in short supply. Competition for engineers and other skilled labor like machinists and paint specialists is tight. All this in a year where demand is dramatically higher than ever before. Despite a planned expansion in our North facility, production growth continues to outpace our space and staff growth.
Response: The Promises We Keep
Our response really comes down to not only the promises we make but also the promises we keep.
Accuracy: We base our decisions from pricing to lead-time quotes on real information in as real-time as we can get. That means right now our prices are on the high side and so are our lead times. But most customers would rather have lead times that are longer but accurate than shorter and wrong by half. And pricing rarely beats reliability in the long run.
Collaboration: Coordinating amidst the delays and changes in vendors due to pricing and other adjustments takes significantly more prep work and collaboration between departments to support each other in continuing operations. That’s a promise we made to each other long ago. Without agile manufacturing practices in place, this would feel nearly impossible.
Staffing: None of this is happening based on the status quo. We are in the midst of the greatest growth in our company’s history. By September, in the middle of a broadly acknowledged talent shortage, we had hired twice as many people as we had in each of the three full years prior. And we’re not finished growing. We are constantly filling positions. That’s thanks in part to the promises we keep to our fellow employee-owners. As stretched as we all are, we still get our weekends and nights off. Balance is essential to great work, and we have been able to protect that for our people.
Quality: We would be remiss if we didn’t mention the undercurrent of quality that never waivers. In these chaotic times, it would be easy to cut corners or settle for what’s available faster or cheaper. We simply won’t do that.
Results: Work In Progress
On-Time Delivery Rate: We’ve shared openly that our baseline goal is a 95 percent monthly average on-time delivery rate based on the actual delivery time (no grace period). We usually meet or beat it. In the past few months, we’ve missed that goal, hovering around 86 percent. But when we miss, it’s by days, not weeks. That’s partly because of the accuracy of our lead times, calculated based on labor hours that are updated every other day. It’s pretty tight. We might quote a longer lead-time than our competition, but you can count on our quote, and that goes a long way.
How do we do this? Our approach to agile manufacturing includes on-time delivery as a shared mission across every department. We’ve prioritized it for years. The transparency and hustle it takes to make it happen is instinctive for us and invaluable for our customers.
Record Production: We surpassed last year’s record sales number in July, and we passed our stretch goal for this year in September. We’ve been able to accomplish a 67 percent higher workload with only a 33% increase in staffing through agile manufacturing efficiencies in training, engineering, sorting, and machining processes.
Warranty Rate: Under record production, the quality has not slipped. And that’s saying something. Our warranty rate, adjusted monthly based on a pass/fail basis during our 3-year standard warranty period, stands at .35 percent. That means that on a rolling 12-month basis, 99.65 percent of our products outlast the 3-year warranty. That’s well above the industry average, and it’s no different this year, despite all the other constraints.
The Moral to the Agile Manufacturing Story
Truly agile manufacturing takes time. In other words, to be fast and nimble in the moment, you must be methodical over the long term. Cultural agility can take years to develop, but it’s well worth the investment in years like 2021 when all “regular” bets are off.
Want to know more about how we work? Contact us any time to discuss our culture, methodology, and capabilities.
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