Sustained Change Improves Results Throughout Sonnax Industries
Sonnax is a leading supplier of aftermarket parts for automotive transmissions and torque converters. Founded 30 years ago, Sonnax employs 150 people in Bellows Falls, Vermont. However, in recent years, Sonnax’s growth rate began to slow down. A year and a half ago, President & CEO Tommy Harmon bought the company with a determination to reinvigorate its history of sustained growth. He appointed a Director of Continuous Improvement to coordinate the effort. Sonnax also began work with VMEC to implement the use of Value Stream Mapping, lending expertise and credibility to the process of changing the company. Mr. Harmon consistently supported Lean Manufacturing, a crucial factor in the success of the program.
The first Value Stream Mapping project addressed core operations in packaging and shipping. Those departments had difficulty keeping up with demand and were plagued with a chronic backlog of work. A cross functional team used the mapping process to identify the extent to which waste had crept into the process over the years. The team noted that “Everything we do is for a reason, but that reason is not always because it adds value for the customer.” Analysis in packaging and shipping also led the team to another area of the company, Quality Control, which was facing similar issues. Within a few months, the team eliminated redundant or unnecessary steps and instituted pull systems allowing Sonnax to relieve its work backlog, cut in-process inventory by $500,000 and improve customer service.
The second project addressed the company’s product development system. Product development is integral to Sonnax’s growth because the company develops about one new product every day. However, the process was slow, leading to frustration for customers and employees. Working with VMEC, Sonnax analyzed its new product pipeline. By learning which product development efforts competed for internal resources, they now make more strategic choices on filling the pipeline. Controlling the inflow of projects helped in two ways. It ensured that projects were supported by management and it reduced the number of projects in process allowing people to spend more time on development and less time on project status updates. Sonnax also found that new product launches sometimes required a different purchase strategy. For a new product, they began to consider how quickly a part could be available, even if speed initially led to a more expensive vendor. In under a year, new product time-to-market was cut by 50%, customers are happier and employees have a greater sense of job satisfaction.
Most recently, Sonnax directed its attention to generating additional sales growth to utilize the capacity generated through its Lean efforts. The company again turned to VMEC to perform Value Stream Mapping of the order entry process. The goal was to streamline order entry, allowing sales people to shift from being “order takers” to “order makers”. Team members from previous Lean activities were called upon to work with members of the Sales Department. The team tracked department activities for a week and found that Sales Reps had less than 2 hours a day to spend on order making functions. The study revealed that excessive time was spent checking for order entry errors and also researching the projected availability of backordered items. Standard work procedures were put into place establishing guidelines for support staff to enter orders thereby reducing much of the required checking. The operational representatives on the team worked on improving the accuracy of product availability information in the company’s computer system. Within one month, accuracy rose from 50% to over 90%, virtually eliminating research time for the Sales Reps. Following these time saving measures, Sonnax was able to institute a system of formalized sales campaigns to better utilize Sales Reps for their primary function of generating new business.
Working closely with VMEC on Lean Manufacturing has transformed the culture at Sonnax. Employees are more focused on the customer and embrace the continuous improvement efforts that are supported by senior management. The result is a company that is once again experiencing profitable growth. President & CEO Tommy Harmon noted that VMEC training and facilitating of Value Stream Mapping was a major source of value. Working with VMEC as the outside expert catalyzed and legitimized the changes throughout the enterprise. New initiatives planned for next year include more intensive work on new product development and other ways of growing market share.