- Increase Sales by $100,000
- Due to decreases in lead times, customers realized they could get products same day.
- Retained Sales of $200,000
- Result of increased efficiency and decreased lead times, they were not losing customers to competition.
- Achieved a narrower focus for manufacturing and sales teams in terms of what products to push.
- Cash Reserve Increase of $600,000
- Due to managing inventory properly, turning inventory into cash, and increasing cash reserves.
- Increase of Investment of $50,000
- From implementing Kanban structure – investing in new automated systems for all work stations and software development for their inventory management system.
Sono-Tek Corporation was founded 42 years ago by Dr. Harvey L. Berger, inventor of the ultrasonic nozzle. The company designs, manufactures, and installs precision ultrasonic spraying systems in different industries worldwide. Their patented ultrasonic technology has replaced conventional spraying methods with more uniform, environmentally friendly, and efficient coating solutions. Sono-Tek is located in Milton, New York, and employs nearly 70 people.
Before Sono-Tek partnered with MTEC, the company knew they wanted to create shorter lead times for their most popular products. They were not only facing a difficult fiscal year, but found themselves facing competition internationally. Although their competition’s products were inferior, they were not able to compete with their prices. The company was carrying excess inventory located in one central warehouse. Their manufacturing process consisted of waiting for work orders to be received by workers in the warehouse, who would prepare kits of parts onto a cart, and then wheel the parts out to the floor to be assembled. This process resulted in excess handling and lead time.
MTEC Engineer Phil VanOss worked with members of the Sono-Tek team to implement process improvements to the three main target areas.
The objective of the Lean initiative was to reduce Lead time, improve the manufacturing efficiency and reduce the amount of inventory on hand while maintaining or improving the quality of the product delivered. The first product selected was the Ultrasonic Nozzles. There were three main improvement efforts: Targeting Sales Order processing, drawings and documentation, and inventory management.
The Sales Order processing project required the team to implement a new process that eliminated several non-value added steps. As a result of this project, the team created a new process for the front end of the business for the standard Sales Orders of nozzles. The new process allows same day shipment of some of the domestic standard orders and will free up some of production control’s time.
The second project dealt with unclear, or hard to interpret Prints and Documentation. The objective of this project was to standardize drawings making them clear and easy to interpret by manufacturing personnel. This would result in improved quality and faster production. The result of this project involved a checklist to now be used as a standard by engineers when updating current drawings and creating new ones.
The third project involved setting up a Kanban and Point of Use Storage pull system for the standard nozzles. This system allows smarter inventory management which in turn will positively impact both the lead time and inventory values. The result of the project is a production and inventory management system that uses visual cues to trigger the production or procurement of standard products.
Executing point of use storage eliminated the need for workers to create kits of parts in the warehouse to send out for manufacturing. Instead parts were place directly into the work stations which did away with unnecessary steps, creating a more efficient work flow.
The Kanban structure allowed Sono-Tek to cut back on much of their excess inventory by managing it more effectively. With the Kanban structure, they now had automated and visual triggers to communicate when orders needed to be filled. Instead of creating a work order, they were instantly notified of what needed to be done.
The Kanban consisted of component parts and finished goods. If there was an order for standard nozzles, they could ship them right away, this reduced their lead time from four weeks to same day, creating a significant competitive advantage. They set up re-order points, so when inventory was low they knew exactly when and what they needed to start replenishing their inventory.
Sono-Tek now uses Lean Principles on a continuous basis, as an employee led function. They work together in teams to implement new lean projects in specific areas they would like to improve.
View our video interview with VP, Rob Engle, to hear more about our work together in his own words.