Paragon Customizes Japanese 5S

April 16, 2004
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GRAND RAPIDS — Using lean manufacturing and the Japanese 5S principles is nothing new to domestic firms, but Paragon Die and Engineering has just folded them into something it calls RFD.

RFD stands for Run Fred’s Diner.

No, this doesn’t mean the automotive supplier is diversifying into short-stacks and eggs over easy.

According to David Muir, process improvement manager for Paragon, RFD is a gimmick: an analogy that the company’s staff designed as a way of refocusing themselves on some very basic, common-sense ways of making a profit in a very hard world.

It started last year when Paragon’s president, Dan Hess, took a tour through a customer’s plant in Luxembourg. Hess was so impressed with the practices he saw that he assigned Muir to find ways of implementing those practices at Paragon, which already was undertaking a round of strategic planning.

“We’ve done things like this in the past,” Muir told the Business Journal, “but with the marketplace the way it is, this definitely had a renewed sense of urgency.”

“We’re a very strong company,” he added. “We have the staying power and means to withstand some of these (market) dips, but we’ve got to make sure we can then bounce back and be in a position to grow.”

As one might expect, he added, every person working at Paragon is acutely aware of the fact that tool shops have been dying right and left. “This is a very difficult industry to be in right now,” he said.

That concern, he said, is what led the firm’s top managers and the board’s operations committee to undertake strategic planning, out of which came the establishment of four teams, each with floor, office and management members. Paragon backstopped the teams with some outside consulting. Muir himself early this year paid an extended visit to the plant in Luxembourg and also, he said, “benchmarked” some local plants, giving that input to the teams.

Muir said the teams came up with some valuable technical internal proposals that he declines to discuss for publication.

As for the rest, Muir said, “It’s not secret and it’s not rocket science. It’s stuff that plagues every industry: the things of communication; the things of getting people to work as a team — of not working in your silo on your specified job, but going outside the silos and working together.”

To that end, he stressed that Paragon did something a lot of companies don’t do.

“We listened to the teams,” Muir said. “And we let the teams decide what direction they wanted to go with not much guidance needed. There were enough people on each of the teams to get a broad aspect of the company: one or two managers, one or two office personnel, two or three guys from the shop in those disciplines, and some people from outside disciplines.

“And logic prevails,” Muir said. “The team comes to a conclusion that management can say, ‘Yeah, keep going!’”

Early this year, he said, “We are getting good ideas from within. And we used some outside benchmarking and brought some outside ideas in — like lean and the Japanese 5S’s. So we’ve taken those ideas and let the teams chew on them.”

Muir said the teams applied those ideas within Paragon. He said there was a lot of enthusiasm and excitement among team members.

“But that’s only about 20 percent of our company,” he added. “It was time to bring everybody else in and get everybody pointing the same direction.”

This is where Running Fred’s Diner comes in, he said.

The “Fred” in question is Fred Keller, the man who founded Paragon 45 years ago. Muir explained that the diner is an analogy — a small, spotlessly clean operation where cooks and waitresses work in perfect sync to put in front of the customer exactly the order he placed, piping hot, with buttered toast and steaming coffee in the shortest possible time.

“Everything has to be in place right down to the salt and pepper shakers,” Muir said.

RFD, then, is Paragon’s version of the five Japanese S’s: Seiri, Seiton, Seisa, Seiketsu and Shitsuke — pick-up, storage, clean, standardize and sustain.

“These are commonsense efficiencies,” Muir said. “We’re not sharing any secrets. Anybody can do cleaning, labeling, organizing, marking, follow-up and making more efficient. These are simple, basic restaurant principles.”

Muir said, frankly, it’s too early to tell if RFD’s rollout two weeks ago has made Paragon more competitive. “It’s too early to measure that,” he said, “but I’m seeing people smile now who haven’t smiled the whole time I’ve worked there.”

What’s more, he said, the painting and improved lighting have made the plant a customer showpiece.

“I swear,” he said, “the lighting is so bright you’d swear you were outdoors. At first you want to rub your eyes.”

The Seiton (storage) aspect of Paragon’s makeover, he said, also disclosed “six figures and more of tool inventory we didn’t have on our books — tools some of the guys had squirreled away because they couldn’t get them when they needed them.”

And right now, he said, Paragon managers are dealing with a forgotten challenge — a frequently stuffed suggestion box. “We’ve got 200 ideas we’re following up on,” Muir said.

He said the suggestions are being treated very seriously as an aspect of Shitsuke — to sustain and follow-through and keep the changes in place.  

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