Koeze Goes Lean To Pursue Customization
" align=right border=0>GRAND RAPIDS — When a jar of Koeze cashews appears at the reception desk or on the conference room table at Christmas time, about the last thing to pop into anyone’s mind is the word “lean.”
But according to Jeff Koeze, the company’s president, the cashews and other goodies are the only features about the family operation that won’t be lean by this coming holiday shopping season.
The firm is working with a consulting operation named Optiprise, a company founded on research that its founders pursued at the University of Michigan. Optiprise has consulted with Steelcase and Johnson Products in this region, as well as with Ford and GM, and manufacturers on mainland China. The firm’s view of lean is that it involves social, cultural and technical change.
Koeze himself says he dislikes the word “lean” because it connotes the notion of downsizing and eliminating jobs.
“In fact,” he said, “we told our people ‘We will not do that.’
“We’re going to come out the other side employing more people,” he told the Business Journal. “It’s not a downsizing exercise. It’s an upsizing exercise.”
But if he doesn’t like the baggage clinging to the word lean, he said he is excited about what he feels lean practices will enable Koeze to do in the years ahead.
He explained that the company late this month or early next will begin operations in its new building on Burlingame about a block north of 28th Street. Optiprise helped design the building and lay out its processes.
Koeze said it’s about time for a change, explaining that the oldest building on the company’s current site consists of an 82-year-old core to which the firm added twice. “It seems like we’ve had everything here,” he said. “We had a peanut butter manufacturing plant. We had a soft drink bottling plant for Nehi Beverages. We had shipping and receiving … ”
He said some areas of the plant now have their third ceiling. “Each generation before me installed new ceilings,” he laughed, “and they’re getting down low enough that I can’t fit in any more.”
And with all those changes, he said, has come a build-up of traditions and methods.
“That never goes away,” he said, “but when you’re given an opportunity to get on a clean sheet of paper — particularly for an older firm in older facilities — it’s a rare opportunity. This is not likely to happen again real soon.”
And he explained that embedded in the process of creating the firm’s new physical structure are certain objectives that have to do with efficient use of space.
“They’re things that seem simple,” he said, “but it’s amazing how many times you overlook them — even simple things like how far an employee has to walk in order to accomplish a job. You work to figure out a way for them to walk less.”
Of particular interest to him, he said, is the way lean processes challenge certain rubrics of conventional manufacturing wisdom. “Before the 70s, the goal was to get bigger and to really exploit economics of scale.
“But since then, the trend has been — particularly driven by information technology and improvements in manufacturing design — to say not ‘Let’s set this machine up and run it for a month,’ but ‘Let’s figure out how we can switch it over every half an hour at a reasonable cost to produce more and more customized products; get the customer the right product at the right time at the right quality and get on to the next customer.’”
Part of lean’s focus, he said, also is to drastically reduce the traditional psychological reliance on having a big inventory. “Inventory ties up money,” he said. “It costs everybody and it doesn’t produce any value. It’s of no value to anybody.
“Once you take that insight,” he said, “and start to chase it down, and then do the same with all forms of waste, you start asking ‘How many other ones do we have?’ It’s amazing how much there is.”
The other mindset that lean fights, he said, is the notion that it’s impossible to customize without driving costs out of sight. “It turns out,” he said, “that there’s no relationship between those two things.”
He said one of Koeze’s goals in adopting lean practices is to be able to greatly increase flexibility in its product offerings.
“Just one mundane example,” he said, “concerns one thing we do, which is to put corporate logos on our glass jars. We do huge amounts of that.
“I’d like to be able to drive the minimums for that process down to one. And we’ve been ratcheting those minimums down.
“My goal at the same time would be to offer four or five options — stick, silk screen, packaging, and so forth — so we’d be able to set our systems up in such a way that it would be possible to give the customer exactly what he wants.”
He said he also envisions enlarging the range of product and product combinations.
He explained that one reason Optiprise was interested in working with Koeze was that the firm already was trying to move in the direction of shorter production runs and higher customization.
And, he added, there’s something about Koeze’s culture.
“We’ve always scrambled,” he said. “Change always has been a constant element, and at no point did we ever settle down and fall into a comfortable rut.
“We do 95 percent of our business in fourth quarter,” he added, “so we all wear multiple hats during the year and renegotiate our job responsibilities on the fly.”
He also noted that the Koeze operation has a tradition of flexibility.
“We have these gift packages that are pretty standard. They’re in our catalog. Well, a customer will call and say, ‘I like that. But can you substitute this for that, and put a logo chart in it? Oh, and enclose a card. And, by the way, I don’t want it delivered by UPS but I want to use some other carrier.’
“It’s nothing for us to receive four or five requests like that on one order,” he said, noting that it is a difficult scramble to implement such orders.
“And it’s my goal — our goal — to get to where we can respond to those special orders really effectively.”
He said the firm has encountered little internal resistance to lean. “We have great people,” he said, “with some incredible employee tenure. We have two guys in their 40s who started as co-op students. And it’s a fun place to work and we keep the spirit light.”
…. And lean.