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COMPANY New Era Cap Company, Inc. is an international lifestyle brand with

an authentic sports heritage that dates back more than 90 years. It is best

known for being the official on-field cap for both Major League Baseball and

the National Football League. The company has more than 14 offices across

the globe with its world headquarters in Buffalo, NY and U.S. manufacturing

operations in Derby, NY.

SITUATION The Company recently consolidated multiple manufacturing

facilities into its Derby location. As a result of this change, current economic

conditions and the company’s growth goals, the Derby facility was affected in

several ways: product mix changed from primarily custom caps to stock caps;

production demand increased by 33%; customer demands were increasing

pressure for lead-time reduction and increased on-time delivery; and lead-time

reduction was seen as helping responsiveness in “Hot Market” times.

SOLUTION Insyte Consulting was contracted to help evaluate the situation and

to provide advice regarding how the company might reduce the queue time

while utilizing existing assets. The consultant analyzed the current situation

by reviewing historical data and trends, interviewing personnel and observing

the operations. Working with key shop personnel, in a two-day kaizen event,

the team identified and prioritized improvements to reduce the queue time.

The improvements focused on FIFO, balancing of operations, and establishing a

pull system by limiting WIP. Computer simulations were created and evaluated

to insure expected results. Revisions to specific areas were implemented in

a two-week pilot program, revised and then fully implemented in a specific

bottleneck area. Throughout the pilot and implementation phase, metrics of

lead time, WIP and throughput were tracked to validate the improvements.

The same approach was then used in a second bottleneck area.

Worked collaboratively within aunion environment to significantlyreduce manufacturing lead times

48PERCENT

Decrease in leadtime of 48%, from

16 to 8.3 days.

Reduction ofWIP inventory

by 34%.

Increasedinventory turns

of stock product.

“The Insyte consulting team, led by Jim Johnson, helped identify areas of opportunityto assist in reducing our facilities lead time by over 40 percent. Jim’s ability to

effectively communicate key issues with management, supervisors, and productionemployees was instrumental to the success of the project.”

—Rusty Hurst, plant manager

CASE STUDY: NEW ERA CAP COMPANY, INC.

THERE WAS A GREAT DEAL OF

INTEREST in Amazon’s recent earnings

report. The online retail giant posted

24 percent revenue growth to $17.1

billion, pushing its share price up over

10 percent and increasing its market cap

to $165 billion. But what really drew

attention was the fact that Amazon

showed a $25 million loss for the quarter.

In fact, Amazon has posted a loss for four

of the last five quarters. Which begs the

question, does profit matter?

Profit it is often seen as proof that a

company is providing products and/

or services desired by the market. In

reality, good or even great products

are not enough to guarantee a profit.

Hostess Brands is a recent example of a

company that made many beloved, even

iconic, products, yet was forced to file for

bankruptcy. Remember the look of panic

on Twinkie-lovers faces on the evening

news? The lesson for business owners

is that it’s not enough to have great

products or services; you also have to

have an efficient organization to deliver

them.

When I visit WNY manufacturers, I

often hear that they are “in the black,”

or profitable. My response is always,

“How profitable could you be?” Is your

shop really perfect? Are your shipments

100 percent on time? Is your Work-

In-Process zero? Do you measure your

cycle time in minutes? Are your annual

inventory turns well into double digits?

Are your scrap and rework non-existent?

Is your capacity utilization 100 percent?

Obviously, perfection is impossible. The

point is: all of us have opportunities to

improve our businesses. In fact, those

improvement opportunities are never-

ending; as soon as you finish one project,

the next one is waiting. That’s why we

call it Continuous Improvement.

The vast majority of WNY manufacturers

have already completed improvement

programs ranging from Lean and Six

Sigma to Total Quality Management

and Theory of Constraints. Many of

those companies think they are done,

but they are wrong. These continuous

improvement projects may not be

exciting, they may not be sexy, but they

typically are the simplest, easiest way to

increase your profit.

All of this does not mean you can or

should always show a profit. Amazon

would claim it is investing in the

business: plowing money into online

grocery delivery, set-top boxes and

original video content, among other

things. Growing manufacturers often

need to invest, too. So lack of profit is not

always a bad thing.

Dilbert creator Scott Adams said,

“Remind people that profit is the

difference between revenue and expense.

This makes you look smart.” In the final

analysis, profit is just an outcome, a

result of many inputs and variables in a

business. So don’t focus on the outcome;

focus on those inputs, the things you can

control. If you have excellent products,

if you make those products efficiently

and reliably, if you continually work to

get better and if you judiciously invest

in your business, then good things will

happen. You won’t just “look smart”;

you’ll actually be smart.

PRESIDENT’S MESSAGE BY BEN RAND

Many manufacturers who undertake

Lean and other Continuous Improvement

programs see great gains in the near

term which often tend to diminish

over time. This regression, known as

“back sliding,” typically occurs as

employees revert to their previous

way of doing things. A very

effective solution to this problem is

TWI (Training Within Industry), a

systematic approach to standardized

work.

TWI was developed by the U.S.

Department of War before World War

II in recognition of the fact industry

would be losing millions of skilled

workers to the military just as their

expertise was most needed to ramp-

up production. The challenge was

how to quickly and effectively train

replacements, including women,

without missing a beat. Rosie the

Riveter and TWI proved up to the task

as American industrial might played

a major role in winning the war. By

1945, more than 1.6 million workers

in more than 16,500 plants had

received a TWI certification. After the

war, TWI methods were used overseas

with great success, particularly

in Japan where TWI played an

important role in the development

and success of both Kaizen and the

Toyota Production System.

TWI consists of four training

modules which can stand alone, but

are most powerful when combined

into an integrated program. The

first module, Job Instruction (JI), is

designed to stabilize your processes

by standardizing work. JI is used

to instruct operators in how to

perform a job correctly, safely

and conscientiously. Typically,

most manufacturing processes are

performed by multiple operators using

slightly different methods. JI requires

the company to identify and teach

the “one best way” thereby creating

a standard method. Process stability

is created by doing the same thing

the same way across operators and

shifts. This standard work lays a solid

foundation for on-going improvement

and results in less scrap and rework,

fewer accidents, and increased job

satisfaction.

Job Relations (JR) training teaches

supervisors how to build positive

employee relations, how to handle

problems, how to prevent problems

from occurring and aids in developing

a logical, common sense approach to

handling people issues. Developing and

maintaining these good relationships

prevents problems from arising and

helps earn loyalty and cooperation from

others. When problems do arise, JR

provides a proven method for getting

the facts, weighing options, deciding,

taking action, and checking results.

The core elements of the program

are basic consensus building and

individual problem solving. JR lays

the groundwork upon which you can

build the next layer of stability into

your processes and results in increased

productivity, improved attendance,

better morale, and higher employee

retention rates.

Job Methods (JM) improves the

way jobs are done by building on

the skills of the operators and first

line leaders such as supervisors. The

aim of the program is to produce

greater quantities of quality products

in less time by making the best

use of the people, machines, and

materials currently available. This is

accomplished by breaking jobs down

into their constituent operations.

Every detail is questioned in a

systematic manner to generate ideas

for improvement. New methods are

developed by eliminating, combining,

rearranging, and simplifying steps

in the process. JM will enhance and

extend your continuous improvement

efforts by delivering a high volume

of small incremental improvements

resulting in reduced costs, increased

productivity, increased throughput

and reduced work in process.

Job Safety (JS) is a complementary

program to increase environmental

health and safety by providing a

framework for supervisors to engage

employees in identifying potential job

hazards and eliminating them. JS was

developed in Japan and, although it

was not part of the original TWI

program, it plays a critical role in

industry today. JS gives supervisors

a method to analyze the chain of

events leading to accidents and

hazardous situations. Root causes are

identified and remediated to “break

the chain”. In JS, the relationship

between supervisors and employees

plays a pivotal role in creating a safe

and environmentally responsible

workplace.

Even though you may not be

fighting WWII, TWI can still

help your company standardize

work, institutionalize continuous

improvement and maximize profit.

Contact us to learn more about how

TWI can help your business.

BACK TO THE FUTURE WITH TWI BY BEN RAND

PROTECT AND EXTEND YOUR CONTINUOUS IMPROVEMENT GAINS

AMERICAN SOCIETY OF

MECHANICAL ENGINEERS 2014

INTERNATIONAL CONFERENCE

AUG 17-20– TO –

8:00A.M.

5:00P.M.

ASMECONFERENCES.ORG

DID YOU KNOW THAT WNY IS THE

BIRTHPLACE OF THE ARTIFICIAL

SPONGE, that indispensable household

item which continues to prove its worth

even in this high-tech age?

The use of sponges dates to Roman

times, when divers harvested natural

sea sponges from the Mediterranean. In

the 1940s a shortage developed in North

America due to a combination of sponge

blight and World War II, which cut off

the Mediterranean supply and boosted

military usage. This led DuPont and

others to accelerate work on artificial

sponges, which ultimately led to the

cellulose sponge, a combination of wood

pulp and vegetable fiber that was longer

lasting and cheaper than sea sponge.

In 1946, three engineers—Gerald

“Red” Murray, Chester “Chet” Hardt

and Jack Bitzer—left DuPont in Buffalo

to start a new company to manufacture

sponges for the household market. They

named the company O-CEL-O after

the chemical formula for their sponge:

Oxygen-Cellulose-Oxygen. The first

O-CEL-O plant started out with only

3,000 square feet and a few employees

on Leslie Street on Buffalo’s East Side.

But the company grew quickly and by

1952 had $4 million in sales and almost

100 employees.

At that point, O-CEL-O was sold to

General Mills whose deep pockets

could support the company’s continued

expansion. Jack Bitzer stayed on with

General Mills and participated in at least

three more patents. Chet Hardt turned

his attention to politics becoming a state

assemblyman, chairman of the Niagara

Frontier Transportation Authority and

a close associate of Governor Nelson

Rockefeller. Red Murray continued

his entrepreneurial career by investing

in various WNY business ventures,

including U*C Coatings Corporation,

located on Fillmore Avenue in Buffalo

and now run by his son, Norm Murray.

Over the next 38 years, under General

Mills’ ownership and Joe Grieco’s

leadership, O-CEL-O grew to more than

$46 million in sales and by more than

400 employees, with 250,000 square

feet of manufacturing space at 305

Sawyer Ave. in Tonawanda. In 1990, 3M

purchased O-CEL-O from General Mills

and continues to invest in the business,

constructing a new office building,

distribution warehouse and adding new

equipment and environmental controls.

To this day, the Sawyer Avenue plant

remains the world’s largest cellulose

sponge manufacturing facility.

The O-CEL-O story is another WNY

business success story based on

innovation. It is also an early example

of a WNY consumer products company,

a category that today would include

the likes of Rich Products, New Era

Cap Company, Fisher-Price, Lornamead,

Setterstix and TRS Packaging, among

others.

MADE IN WNY: THE SPONGE WAS COMMERCIALIZED IN BUFFALO BY BEN RAND

EVENTSRECENT PROJECTSA SAMPLE OF PROJECTS THAT

INSYTE HAS RECENTLY CONCLUDED

WITH WNY COMPANIES:

• HelpedanErieCountymanufacturer

of innovative technologies for new and

high-tech materials develop market

positioning and messaging for a specific

product line to differentiate itself from

its competition in targeted markets,

including Mexico and Brazil.

• Providedleansixsigmaandquality

management support to a Cattaraugus

County manufacturer of coating

powders and molding compounds to

improve processes and efficiency for a

specific product line.

• Worked with a Buffalo metal

component manufacturer to develop

and introduce an e-Learning module

for contractor safety training, with

the goal to eliminate recordable

accidents and improve efficiency and

effectiveness of contractor training.

• Analyzed and improved product

movement at a Niagara Falls packaging

manufacturer’s warehouse to provide

an improved methodology for running

the warehouse operations with a goal

of reducing truck wait time, while

increasing efficiency and reducing

cycle time.

• SupportedanErieCountymetalparts

manufacturer’s ERP selection process to

ensure strategic alignment between the

company’s goals and project objectives.

The ERP system installation supports

the company’s goal to increase annual

revenue by 50% within five years.

• Providedsalesandmarketingsupport

to help a Southtowns aluminum-

casting manufacturer attain a minimum

annual compounded revenue growth

of 20%over the next three years for a

targeted division.

• Assessed a Chautauqua County

precision tooling manufacturer’s

operational and administrative

areas to help the company reach

its revenue growth goal of 10% in

FY2014 and lay the foundation to

support sustained profitable growth

in subsequent years.

• Recommended improvements to a

Northtowns packaging manufacturer’s

main conveyer line to minimize

bottlenecks and improve efficiencies.

• HelpedaNiagaraCountymanufacturer

of high temperature insulation products

streamline its safety procedures to help

all employees better understand and

utilize the procedures with the goal to

annually save thousands of dollars in

reduced work-related injuries.

• HelpedanErieCountyprintingand

packaging manufacturer implement

an ISO 13485:2003-compliant Quality

Management System and prepare for a

certification audit by a third-party.

WESTERN NEW YORK SAFETY CONFERENCE

WNYSC.COM

MAR 12 & 13– TO –

7:00A.M.

5:00P.M.

WESTERN NEW YORK VENTURE ASSOCIATION MEETING

WNYVENTURE.COM

MAR 12 – TO –

7:30A.M.

9:00A.M.

INSYTE-CONSULTING.COM