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Spring loaded continuous improvement
No matter how good they get at Automatic Spring Products Corp., Steve Moreland and his team are going to try to do better.
The Grand Haven company, in the business of making all kinds of springs and metal products for industrial customers since 1950, barely survived the first three years of the new millennium. Then it had another very difficult period in 2006. Then it took a beating in the Great Recession.
As one might suspect, ASPC is an auto industry supplier. But, like other Michigan auto suppliers, things are going very well now at ASPC, compared to the first decade of the 2000s.
The company produces wire springs, clips, stampings, precision-ground shims, wire forms, washers and assemblies of all types. It is one of perhaps 500 spring makers in North America, but probably ranks in the top 5 or 10 percent in terms of size, according to Moreland, president of the company.
Despite its long history and good reputation, in its fiscal year 2008-2009, sales plummeted to a total of $17 million, and the ASPC work force shrank to 110. Three years later, the employee roster numbers 270 in its two Grand Haven plants, with another 45 or so in its plant in Mexico. Sales this year will total more than $40 million.
The company’s tenacity in the face of adversity, and its resurgence in the last three years, got the attention of the Michigan Manufacturers Association. The MMA just presented Michigan Manufacturer of the Year awards to companies in two categories: more than 200 employees and less than 200. In addition to the two top honors, there were also three finalists in each category, and ASPC was one of the finalists in the large-company category.
ASPC was recognized for “outstanding achievements in continuous improvement, lean implementation and successful strategic planning efforts which helped the company to rise above the challenge” of having lost major customers at critical moments.
In 2000, ASPC began construction of a new 53,000-square-foot facility on Hayes Street in Grand Haven Township. It already was operating the original 105,000-square-foot plant on Taylor Street in Grand Haven.
Right after the groundbreaking, one of its five largest customers, Breed Technologies, went bankrupt. Six months later, another major customer, Key Plastics, entered bankruptcy.
“We had just taken out a huge loan for this new building and for a lot of equipment that was going into it, because of all the projected sales growth we had. And if that wasn’t enough, about six months later, 9/11 hit, and that just sent our sales spiraling downward because the whole economy just shut down for a while,” said Moreland.
A third client bankruptcy in 2006 was “potentially more devastating because they were our second-largest customer and a pretty good percentage of our business,” said Moreland. The company was Dana Corp.
In the depths of the Great Recession in 2008 and 2009, “we also had a near-death call,” as did many auto industry businesses, according to Moreland.
“Anyone who was in the auto industry was scared out of their minds,” he added.
Somehow, ASPC hung on, and today all three of those automotive industry customers it had years ago have been reorganized into new companies and are again doing business with ASPC.
Moreland is a man in love with his company and his work.
ASPC was founded by Moreland’s grandfather in 1950. His father, trained as an architect, joined the family-owned-and-operated company in 1960, and took it over from his father in 1975. Moreland earned a metallurgical engineering degree at Purdue in 1978 and went to work for Pratt & Whitney in Florida.
Eventually, his father “enticed me to come back in 1980,” said Moreland. Although he did not realize it at the time, he joined the family business exactly 20 years to the day that his father had. When his father retired in 1996, Moreland took the helm.
“I found that I loved the thrill and excitement of a family business, and the challenges — and opportunity,” he said. “I’m just kind of hardwired for continuous improvement.”
“In a family business like this, you can literally work on improving the business every day, from now to the end of time, and just have a blast doing it. Every day, we want to be better than we were the day before,” he added.
Moreland describes his work force as “incredible,” with workers who are “really wonderful, caring people” who care about the company, their fellow employees and “about making things better.”
In citing ASPC as an exemplary manufacturer, the MMA noted through Moreland’s leadership, the company implemented the “theory of constraints” and lean manufacturing principles, resulting in significant savings that helped the company survive the recession and the loss of major customers.
The theory of constraints (TOC) was originated by Eliyahu Goldratt, an Israeli physicist who became a business management guru. TOC is based on an overall framework that can help a business determine what it needs to change, what to change to and how to cause the change, which entails overcoming the inherent resistance to change found in most organizations of any kind.
Lean manufacturing is so widely accepted that “anybody in manufacturing today is doing that,” said Moreland. Lean manufacturing basically means trying to develop a manufacturing process involving minimal inventory and minimal processing time.
ASPC, however, uses both lean manufacturing and TOC.
“Not everyone does that, but that’s something we found works for our business model,” he explained.
TOC is a “whole different way of looking at manufacturing, from the standpoint that there is always a bottleneck in every manufacturing plant,” said Moreland. Bottlenecks are the point in the process where any delay or halt in production affects the entire operation, so the goal is to keep it running smoothly around the clock, six days a week.
“If it breaks down, everything stops. Nothing can get through it,” he said, so the object is maximum management of those constraint points.
TOC, which has been in use at ASPC for 10 years now, is best looked at as “a focusing tool,” according to Moreland.
At ASPC, a bottleneck is found where “the most product must flow through one process,” he said, mentioning heat treating as one of those areas. If the heat treating furnace is down, it prevents the company from reaching sales goals because there is no way the company can ever make up for the lost time.
Included in the continuous improvement philosophy at ASPC are also issues such as plant safety and environmental impact.
“All of those things are important to our business,” he said.
“Just getting incrementally better every single day is what gets me out of bed in the morning,” he said. “I can’t wait to see what we’re going to do today.”
ASPC is both vertically and horizontally integrated. It produces a wide range of springs of all types, so a customer does not need to look elsewhere for other kinds of springs. The company is vertically integrated in that it has its own design team on staff to work with customers who come up with new concepts for springs and stampings. ASPC does prototyping, and it can produce its own tooling, too. Heat treating is something many manufacturers outsource; not so at ASPC.
ASPC strives to “control the process from the very beginning of a concept to the end,” so it has the advantage of being able to respond quicker to customer demands while controlling the quality at every step.
Moreland said ASPC ships products to 33 countries around the world.
“I haven’t got any customers in Antarctica yet, but we’re on six continents, anyway,” he joked.
The ASPC plant in Mexico has “actually helped our business in Grand Haven grow pretty substantially,” said Mooreland, because large multinational companies that have plants in both Mexico and Michigan tend to prefer having the same supplier for both locations.
“People think, ‘oh, they’re going to Mexico. That’s horrible.’ Actually, the reverse is true. Had we not gone to Mexico, we would not have grown in Grand Haven nearly as much,” he said.
At the same time, Moreland said the “re-shoring” of industrial production that had gone offshore years ago is a reality. He attributes that to a combination of situations; one is the cost of labor overseas, which is “increasing at a much faster pace than here in the United States. They’re still lower but the amount they are lower by is shrinking.”
Currency exchange rates have been more favorable for the U.S. dollar lately, too. Then there is the quality issue: American manufacturers generally provide more consistent quality, he said. Overseas production orders often require much larger volumes to be cost effective, resulting in large inventories.
Sourcing locally in the U.S. can help reduce the quality issues and the need to maintain large inventory, he said.