Frost & Sullivan recently presented the 2005 Lean Manufacturing Leadership Award to Coni-Seal Inc. for its cost-efficient production of hydraulic brake components for the North American aftermarket.
This award is presented to companies that employ the leanest manufacturing strategy in their respective industries. Recognized manufacturers have demonstrated successful techniques for reducing overhead and redundant processes to become more profitable and stable than its competitors.
They also put procedures in place to get their products to market faster and to provide on-time delivery. The results include better output per person, manpower savings and improved product quality.
Coni-Seal’s lean manufacturing strategy includes the following elements:
– Synchronized inventory cycles between the company and its suppliers;
– Flexible supply chain allowing for sourcing of components from vendors and avoid costly delays in delivery;
– Automated packaging that facilitates the mass customization of products;
– Digital inspection of raw materials and components to ensure product quality and reduce manpower; and
– Human resources approach that includes many part-time, flexible shifts and promotes entrepreneurial spirit.
Coni-Seal operates as a hybrid supplier in the aftermarket, at times fulfilling the role of a manufacturer and other times functioning as a repackager. Materials and components are sourced from around the world. Coni-Seal’s joint ventures and marketing contracts allow the company to time its inventory levels with its partners so that all are part of the same supply chain. This reduces Coni-Seal’s costs and diminishes downtime resulting from shortages. It also eliminates the risk of materials scrappage from the company’s production process.
The company’s ability to obtain components quickly through aggressive buying teams and well-tuned logistics is a key component of its low variable cost structure. But Coni-Seal does not sacrifice on quality in order to reduce costs. Coni-Seal recently purchased new digital inspection equipment that monitors the quality of raw materials and components entering the production floor. The machines also conduct random sampling of all incoming goods to ensure the quality of all finished products.
In addition, the company uses automated packaging machines that allow it to produce printed sleeves customized to each customer’s specifications. This adds value for the customer, but also reduces the time employees spend handling the product. A key part of Coni-Seal’s value proposition is its ability to ship finished goods more quickly than its competitors. By streamlining its assembly processes, the company is able to consistently deliver on this promise.
Coni-Seal also stays lean by employing workers on flexible shifts. The company gives its workers convenient schedules and motivates them with extra benefits and frequent updates from top management. Coni-Seal’s ability to meet its customers’ needs by using its human resources efficiently is a key competitive advantage that demonstrates the value of lean manufacturing.
Coni-Seal produces hydraulic brake components under its own label and for more than a dozen other distributors and retailers under private-label programs. Its variable costs are lower than those of other manufacturers, and the company passes its savings along to customers in the form of lower prices. This has caused other manufacturers of hydraulic brake components to lower their prices to remain competitive with Coni-Seal.
In addition to lower prices, Coni-Seal delivers customized products, quick order fulfillment and responsive customer service through its lean production processes. This allows Coni-Seal’s customers to focus on their core competencies instead of making parts they cannot produce profitably. Coni-Seal is the only major supplier to specialize in hydraulic brake parts, causing distributors and competing suppliers alike to rely on the company’s expertise for these low-volume components.