Woodridge, IL, August 19, 2010 – Tattletale, a portable alarm systems company based out of Westerville, Ohio, selected The Morey Corporation (MOREY), a leading Electronics Manufacturing Service provider, to manufacture and fulfill the world’s first portable, cellular-based security system for consumers.

Tattletale’s new Consumer Unit is designed so customers can easily self-activate the system and then protect a home or small business from up to 2000 feet away from a self-contained, tamper-proof base unit.  The unit is activated by simply plugging it in and pressing one button on the remote control. Additionally, it’s portable so consumers can take it with them when they change addresses.

“We made the strategic decision to bring manufacturing partner operations back onshore, and MOREY has an excellent reputation in the electronics industry – it’s a great fit,” says Brian Hess, Inventor and CEO of Tattletale. “In addition to the Consumer Unit, we will look to MOREY to manufacture our complete suite of portable alarm products in the near future.”

MOREY, who operates exclusively in Woodridge, Illinois, will provide comprehensive technology, manufacturing and fulfillment services for Tattletale. Tattletale chose MOREY for the company’s deep expertise in wireless devices and for the myriad advantages of working with a manufacturer based in the US.

“We’ve seen a tremendous recent uptick in new inquiries for our services in 2010 from companies that are re-evaluating their offshore manufacturing strategy,” said Dana Morey, Executive Vice President for MOREY. “The key issue is learning to look at total cost of ownership, which includes everything from global shipping costs and product quality to six weeks of inventory sitting on a boat. We’re excited to partner with Tattletale on an exciting industry first in consumer security systems.”

The Consumer Unit has multiple applications including residential, office, retail businesses and residential properties. The unit is scheduled to be available in September 2010 with volume ramp-up continuing throughout 2011. Technology partners include AT&T, Sprint, Verizon, Motorola, Secure Wireless, Numerex, and other alarm dealers through ADI, a leading wholesale supplier of security products.

ABOUT TATTLETALE

Tattletale’s primary business is the design, development, production, and marketing of the world’s first transportable, cellular security system with high performance wireless sensors. Tattletale also provides 24-hour, nationwide wireless monitoring for every Tattletale security system sold. Tattletale employs a variety of proprietary design, construction and implementation techniques that give it the most technologically advanced products in its marketplace. All products are grounded in a portfolio of technology patents, and will continue to develop and patent new wireless technology as they grow their alarm product family. Currently, Tattletale has been awarded six U.S. patents addressing the hardware, technology, business methodology, and trade-dress of Tattletale products. Tattletale’s family of patents makes it impossible for a competitor to offer competing, transportable wireless alarm products. For more product information, visit www.tattletalealarm.com/systems.

ABOUT MOREY

MOREY is an award-winning, 75-year-old Electronics Manufacturing Services (EMS) company providing comprehensive design, engineering, manufacturing, and testing services for Original Equipment Manufacturers, Applications Service Providers, Suppliers and other enterprises relevant to the aerospace & defense, industrial, utility, communications, heavy off-road/on-road and agricultural vehicles markets. MOREY-manufactured electronics can be found in every region of the world powering mission-critical applications in the most demanding environments on the planet. MOREY leverages deep expertise in telematics, power electronics, controls, sensors, displays, cord reels and handsets for its customers and complements its EMS offerings with value-added expertise in program management, ruggedization, legacy support and global supply chain management. MOREY is based in Woodridge, IL, and operates a 200,000 square foot, state-of-the-art manufacturing facility and design center.

Looking for the least-expensive place to make a stainless steel, anodized aluminum, high-end electronic parts or even Frisbees? Check out the United States.

How about automated teller machines, earthmovers, ready-to-assemble home and office furniture, or water heaters? A variety of manufacturers have turned their backs to a surprising extent on China and other supposed low-cost countries. They have either brought manufacturing facilities back to the States, or decided they can be more competitive by staying and expanding production in America.

The crux of their thinking is not simply low price, although that remains, of course, a critically important factor in the simplistic offshoring approach of some manufacturers. Rather, the most important concept now is total cost of production—with those costs measured in terms of wasted time, inflexibility, shipping costs, management attention, political uncertainty, intellectual property theft, quality standards and all the other serious issues that have dogged companies that sought supposed “low-cost” havens in Asia. In the world of economic cycles, the pendulum is swinging once again in favor of the “all-in” winner: the skilled, fast, reliable and extremely efficient companies of North America.

There was a time, not 10 years ago, when hardly anyone would have believed it. China, with its pennies-a-day laborers, and India with an almost-as-inexpensive work force, one that even speaks English, were the almost faddish, low-priced spread for a range of manufacturers. You could make a finished product in China, they would say, for what the raw materials would cost in Ohio. And by the middle of the last decade, the store shelves of America were packed with goods “Made in China.” Even our bridges, tunnels, buildings and electronics were all-too-often made with materials that arrived by boat from Asia.

The result, as we know, was a continuing loss of factories and manufacturing jobs and an ongoing trade deficit. Last year alone, says the U.S. Bureau of Labor Statistics, “The manufacturing sector accounted for 36% of all mass layoff events and 43% of initial claims filed.” The bureau said that for the year, “the total numbers of mass layoff events, at 28,030, and initial claims, at 2,796,456, reached their highest annual levels on record.” And this only continued an ominous trend. The U.S. Census Bureau, for instance, reports that between 2002 and 2007, even before the recession dug its teeth into the economy, 1.3 million manufacturing jobs had been lost and nearly 57,000 “manufacturing establishments” as the agency calls them, had been closed.

OUR PRODUCTIVITY GROWS

And yet, the BLS also reports that, in part because of those layoffs, first quarter productivity increased 3.6% over the same period last year, the sharpest boost since 1962. Last year, productivity was up a remarkable 3.7% over the year before.

That is only part of the reason that a surprising number of companies are now rethinking, adjusting and reversing their offshore manufacturing strategies. Caterpillar and General Electric are only the most prominent examples of large companies that have announced they intend to bring at least some of their manufacturing back to the states. NCR has said it will be making its most sophisticated automated teller machines in Georgia instead of China, where they have been made for the last three years. ThyssenKrupp Stainless USA president and CEO Ulrich Albrecht-Frueh told Forward magazine in March that making stainless steel in Alabama is now just good business. “If you look at the main costs, the true costs of operations all over the world, we have an advantage here from energy costs, some advantage from personnel costs and reduced risk from transportation and inventory costs,” Albrecht-Frueh said. “On hot band, for example, we will probably save more than 10% over the average from elsewhere in the world.”

But we are not talking just sophisticated processes or high-tech stuff here. Wham-O is moving production of its Frisbees and Hula Hoops from China to California. There are no good numbers to quantify the strength of the wave of manufacturing back to these shores, but there is enough to have coined new terminology for it. You will read more about “re-shoring” and “back-shoring” in the months and years ahead.

All of which is great for American manufacturing, the economy and its workers. But why now? Chinese workers, for one thing, got tired of working for a bowl of rice a day. A March JPMorgan Chase Bank, Hong Kong, study saw China’s “monthly wage growth averaging 14.8% since 2000.” Guangdong Province increased its minimum wage by 21% beginning May 1, bringing it to 1,030 yuan, or $150 per month, “not including benefits, overtime, board and meal allowances,” says Xinhua, the official China news agency. Not much by North American standards, but more than previously.

THE DIFFERENCE BETWEEN THEN AND NOW

“You have to contrast everything from around 2002 or 2003, when the big rush to China began,” says Taymur Ahmad, vice president of operations for MOREY Corporation in Woodridge, Illinois.

MOREY makes sophisticated, often custom-designed electronic parts, controls and systems. MOREY is shifting much of its manufacturing out of China, says Ahmad. “Before I joined this company, I was in charge of putting a billion-dollar facility in Shanghai for Phillips, so I know there was a huge draw,” says Ahmad. “It did make sense in 2003 and 2004. Things were different. We didn’t know about logistics costs and 26-week lead times. But now in 2010, the equation has changed completely.”

“We have seen fuel costs triple, and labor costs over there increase 50%,” Ahmad said. “And there is our currency to consider. The exchange between the renminbi and the dollar has continued to weaken, and every economist agrees that the renminbi will now be valued upwards, perhaps by as much as 10% to 20%. So you lose 20% of any cost gain. Yes, it has only changed less than 3% recently, but we are sure it will change in the future.”

More than that, Ahmad explains, the reasons to re-shore and to stay here often vary depending on the manufacturer. “If you are making any kind of electronic devices, the supply chain is volatile,” he says. “The demand is up and down. The orders can be 20,000 and then nothing. We still get some things from China. But they have put everyone on allocation, because they need the materials for their own economy. And that makes sense for them, but it leaves us high and dry.”

Last year, MOREY’s business was down 50% compared to the year before. “But our work began picking up a month and a half ago. All our customers have given us order increases,” Ahmad said in a May interview. “And we have added 60 to 70 people to our base of 600 or so. But we are being careful; when our business was down, we went lean and learned how to do things with fewer people.”

Ahmad’s story is familiar to Stephen Maurer, a managing director of AlixPartners LLP, a management consulting firm headquartered in Southfield, Michigan, with 14 offices around the world. AlixPartners issues an annual ranking of countries based on their relative competitiveness. Maurer’s expertise is international operations improvement, product development, manufacturing and supply chain management.

“In ’05 and a bit after, there was a lot of momentum and people were jumping on the bandwagon to go to China,” he recalls. “There was a lot of cheap labor, shipping costs were relatively low, and of course there were raw materials advantages, too. And this huge potential market. But in other cases it just was maybe a bit rushed and premature. If you have a product that is less sensitive to these factors, a high technology, niche product with substantial margins, you have to look really hard at moving now to be sure it makes sense.”

You don’t have to convince Mike Campagna, president and COO of Aurora, Illinois-based Peerless Industries Inc., one of the country’s largest manufacturers of audiovisual mounts and brackets. “About five years ago when everyone else was rushing to China, we were buying all our aluminum die cast products out of there,” he says. “We are metal benders and couldn’t source them in the U.S. at a competitive price. Eventually roughly 30% of our product was out of China.”

Source: Brad Coulter, O’Keefe & Associates

THE PROBLEMS: SPEED AND THEFT

But at the same time, Peerless was having trouble getting that product as quickly as it needed it. “So we began looking at the freight costs, and warehouse costs were getting expensive. When we started picking apart the costs, we started to realize that we could, on a competitive basis, make all our stuff here in the U.S.”

“We wanted to continue to manufacture it,” Campagna says, “so we invested in die cast equipment and brought the whole thing back.” Campagna found an ideal building on 24 acres at “a great price” in Aurora, Illinois and gradually shut down his less efficient, four-building plant in Melrose Park. “We are hiring now, because we were up 5% in the first two months of the year and that has continued,” he said. “We bottomed out last February at 303 employees and are now back up to 457. These are mostly manufacturing and skills jobs, like quality engineers and designers.”

In China, Campagna says, “We had some issues with patent infringement. The Chinese companies were stealing our designs. So we thought we could do it here without all that.”

Newark, Ohio-based Anomatic Corp. was concerned about its designs as well, after opening an anodized aluminum manufacturing plant in China three years ago. Anomatic makes anodized products for a variety of industries, including personal care and electronics.

But it keeps its sophisticated tools and designs at home, developing them in Connecticut and shipping to China only the “plain vanilla” machinery, as Scott Rusch, Anomatic’s executive vice president and CFO puts it.

Raw material quality and availability, among other things, have kept Anomatic expanding in the U.S. more than overseas.

“We can’t get the quality of the aluminum we need in China, so we have to bring it in from the U.S.,” he says. “That’s why we are sourcing more and expanding here. For example, in our metal forming area we’ve expanded by about 25% in both capacity and the number of employees.”

“Doing business in China has its challenges,” he says. “One of the key ones is getting and keeping a trained work force. As we teach them the skills, they tend to look around and move away to other jobs. Retaining good employees can be a problem.”

CUSTOMERS WANT U.S. PRODUCTS

Besides, Rusch says, “customers are now asking for products to be made here. In the personal care industry, as new projects come up we see that clients are frequently looking to source more items here than from China. Companies here want to reduce their carbon footprint, which involves shortening lines of supply, and reducing freight and shipping, so all of those things have created the move to put more production back in the U.S.”

Electronics parts maker MOREY became concerned, not only about quality issues in China, but also that the length of its supply chain was slowing its response time to a range of crucial customer issues. “You know the quality issues from dog food to baby milk to toys,” says MOREY’s Ahmad. “Their quality is different. We expect our things to work 100% of the time. But not in China. They expect one-tenth the quality.”

“But it is the recovery from quality problems that is so important to us. Here within minutes we know if there is a failure and what we are going to do about it. There is no language barrier or time difference. We are on it, real time.”

“If you are used to and need a 24-hour response cycle, you cannot do that from China without huge costs,” Ahmad says. “We realized that it was just very difficult to have six weeks of inventory on boats all the time.”

One of MOREY’s newer clients, NetworkFleet, Inc., appreciates that quality control and response time. The company makes and sells GPS tracking systems for companies that manage fleets of vehicles, and had plenty of bids from overseas manufacturers who beat MOREY’s FOB prices. “But we needed to look at total costs,” says Diego Borrego, founder and vice president of product engineering. “We need a steady flow of high-quality product and the capability to make changes on a three- to six-month design cycle. I can’t afford to have six months of inventory sitting on a boat. We’ve got to be able to call them one day and say, ‘We’ve got to make this change. ’We need a lean manufacturer with just-in-time capabilities who can react to my needs and manage change very quickly.”

THE MOVE TO PROXIMITY MANUFACTURING

The manufacturing consultants we interviewed all agreed that because of changing freight, energy, labor, tariff and other cost structures, an increasing number of manufacturers want to locate closer to their clients’ assembly and delivery points. Proximity manufacturing, as this is called, has a lot of things going for it as the global economy recovers from recession. Just-in-time delivery of high-quality goods will become even more necessary, the consultants and manufacturers say, especially for the sort of high-value-added products that are, and increasingly will be, a U.S. strength.

“Companies have different market sensitivities, types of products or product life cycles that may not lend themselves to a long supply chain,” says Michael L. Hetzel, vice president for the Americas at McHenry, Illinois-based consultant Pro QC International. “Take cell phones. Initially, cell phone users were few, the phones were expensive and could be produced anywhere. Then they became a commodity and cost reduction became a key factor with offshoring as the result. As a mass-produced retail product, retailers would order them a million units at a time and they all looked alike and mostly did the same thing. So it made sense to bring in a shipment from China. But now we have mass customization that has fragmented inventory, as well as evolving technology leading to shortened product life cycles. So to manage an inventory that was previously a million phones, you might have 200 variable SKUs in that population which increases inventory volume requirements. You need large inventories to buffer the long distance supply chain and those larger inventories become more costly and problematic.”

You also need to consider the costs of government regulations and approvals, and finding good suppliers. “If you need FDA approvals, for instance, and other certifications of suppliers and materials, moving things can be hard. It can be hard to get new suppliers qualified,” says Maurer.

MISTAKEN TRANSFERS TO ASIA

That’s easy to understand. But how, then, did coming back really make sense for Wham-O and its Frisbees? Wham-O’s President Kyle Aguilar says it was because of high freight and increasing labor costs. Maurer says the Frisbee “is probably exactly the sort of thing that should never have gone over there in the first place. That is made with an injection molding machine that you can buy for the same price, wherever. And there is not much labor in it. It’s made with a big machine that sits there and chunks out Frisbees all day long. It is a low-value product that takes up a lot of space and does not require a lot of labor. And it is relatively expensive to ship because it is light. Containers are getting back to $3,000 a load, for instance, and if you are making integrated circuits, you can put millions of dollars worth in a single container, so the cost per unit comes way down. But if you are bringing back $5,000 worth of Frisbees, they may fill a whole container.” Frisbee, though, may be something of a special case in the low-end toy market, which is generally more labor intensive and as such still features a lot of “Made in China” labels.

“Those that tend to get the most benefit of domestic sourcing is the high-mix, low-volume stuff,” says Harry Moser, chairman emeritus of Agie Charmilles LLC, a machine tool supplier. He is working with the National Tooling and Machining Association and the Precision Metalforming Association to bring more manufacturing back to the U.S. “If you are making a million of one thing, it may make some sense to go to China. All you have to do is get one part right and you have a single set of setup costs. But if you are making three each of a thousand parts, you’ve got 1,000 parts to get right. So anything with high mix and low volume, anything where you need a high degree of accuracy, where intellectual property protection is a consideration, or where you have safety concerns, are likely candidates to be brought back here or to stay here.

“If you are making buckles for parachutes, you do not want to get them from China,” says Moser. “If one fails, you want them to have come from a reputable company in Cleveland that has product liability insurance and where you have a chance of collecting on any claim you might have. Also, if a product is made from sophisticated material, something that is not produced in China, where you have some risk of having inferior materials substituted, you do not want that made in China or any other so-called low-cost producer,” says Moser. “Or for things that may enjoy what is called a clustering effect, when a company and its vendors being close together can share ideas, react quickly, make improvements quickly, can innovate and optimize and control the outcome in a number of ways, that is much easier to do when they are close together.”

TOTAL COST OF PRODUCTION

Not only are there a large number of frequently overlooked factors to consider in the offshoring equation, but also it is extremely hard and meticulous work to assess them accurately. “It takes a lot of management time to figure out overseas sources,” says Brad Coulter, a director at O’Keefe & Associates, a financial consulting and turnaround management firm just outside Detroit, Michigan. “And there are a lot of questions. Is your intellectual property going to go out the door? Will the overseas supplier find a better offer and shut off your business? It is often hard to guarantee the contracts. And corruption is always in play. Your purchasing guys and sales people may be getting incentives under the table.”

“This is not insurmountable, by any means, for a large company. But the smaller ones may not realize what they are getting into,” Coulter says. “Any time you lengthen the supply chain you get all kinds of unanticipated risks, port strikes, port congestion, customs and valuation issues, shipping accidents and breakage.”

Moser and many others point out that much of this becomes startlingly clear when costs are analyzed fully and accurately. “They may look only at FOB prices and not the Total Cost of Ownership,” Moser says. “Total Cost of Ownership includes all of the costs and opportunities that influence the bottom line of the company rather than just the FOB costs, most of which are not captured by a classic accounting system but are clearly in the overheard.”

“Nothing gets more valuable on a boat,” says Hetzel. “U.S. manufacturing executives are sadly, and too frequently, uninformed about implications of supply chain architecture. And it’s not just purchasing, but throughout the company. These decisions are relegated to executives in isolated departments who don’t talk to one another in order to fully rationalize the supply chain architecture.”

“They are not considering this as an integrated cost problem,” he said. “The fragmented nature of today’s corporate structure works against re-shoring. But once we start looking at real total costs, and particularly when companies re-integrate their departments, the re-shoring trend will accelerate tremendously. It is just good business.”

At the same time, the globalization of world trade seems unlikely to stop. Companies that can manufacture and sell their products into the world’s markets may find that it makes more sense to shorten their supply lines and produce goods as close to their overseas end markets as possible. Moser, for example, says, “If they are making it in China and assembling it there and/or selling it there, they are not going to bring it back here unless they are having horrible problems. We know that.”

And of course there will still be companies that find the economics of offshoring irresistible and the search for the lowest-cost producer imperative.

“There are always going to be low-cost countries and they are getting better all the time, acquiring skills and adapting to training,” says Maurer at AlixPartners. “Look at China, which is now getting more expensive. But India is still cheap. And if the barrier is just transportation costs, the cost from Mexico may not be different than it is from different parts of the U.S. For those products where it does make sense you can be at a big disadvantage if you don’t relocate.”

In fact, the AlixPartners 2010 survey of the world’s most competitive economies shows Mexico in first place for the second year in a row. The United States actually dropped in competitiveness from fifth in 2008 to eighth in 2009. China slipped from fourth to sixth in the same period. After Mexico, in 2009, the most competitive economies were India, Vietnam, Russia, Romania, China, South Korea and the U.S. in that order, says AlixPartners.

“We are seeing more of a movement to Mexico,” says Maurer. “This is muddied a little by some of the safety and stability questions. But right now Mexico is very cost effective for us. I’ve got three clients right now, an auto parts supplier, a recreational durable goods maker and a consumer products company, and all three are looking to rebalance their manufacturing networks, and all three are looking at moving a portion into Mexico.”

But as Maurer concedes, the AlixPartners survey, which ranks countries according to seven different cost factors from raw materials and labor, to freight, duties and exchange rates, does not try to calculate the costs of the corruption or intellectual property problems that are often rampant in low-cost economies. “That’s true,” said Maurer, “the costs of corruption and copyright infringement are not in here. We wanted to focus on core economic factors. But those definitely have to be part of the decision [making] process.”

Hopefully, that decision-making process will become more intelligent and sophisticated. When North American companies accurately calculate the total cost of ownership of products they are thinking of producing offshore, these shores may, indeed, continue to look more inviting. But the global manufacturing environment is only going to get tougher and more competitive. That means those venerable factors, quality and service, reliability and value, will become even more important in the decision matrix.

“The message for those who want to stay or come back is: You have to be world class if want to do that,” Maurer says. “You can’t be mediocre and high cost. You have got to have a differentiated product and superior operations and execution or you can’t overcome the fundamental economic advantage.”

We spent a lot of time working towards a high performance culture of continuous improvement.  As part of this, we launched improvements using the “A3” format.  In a nutshell, the A3 format states any improvement project should be done on an A3/11X17 pc of paper divided into 4 quadrants – business case, current state, future state, and actions needed to reach the future state.  If it’s too big for an A3 size paper, it’s too big to tackle as one improvement project.

When we started out, we focused on getting people to buy in to the concept of creating A3’s for any improvement, no matter how big or small the benefit.  This proved to be a great launch because we got a lot of people to start improvements and focus on any improvement.  We were flooded with ideas.

Where we stumbled a little was that we started seeing so many improvements being launched that we were sucking up resources very quickly.  In response, we made a “vetting” process to make sure that the right improvements were being worked on first.  By “right”, I mean the ones with the biggest benefit to The Morey Corporation.  We thought this would be a good way to prioritize improvements so that we were not scattered all over the company trying to do too many improvements at once.  The unexpected by-product of this was that the perspective of the employees changed to one of “you won’t get resources for any improvement you launch unless it means a big gain for the company”.  By default, the well of improvement ideas ran dry very quickly.  Why spend time trying to promote and implement an improvement, if you don’t think you will get resources for it?

I don’t feel we were trying to push an agenda of “Only big dollar improvements will be accepted”, but that is what happened.

Now, we are working to go back to where we were a year ago to re-promote the concept that we don’t want home runs.  Walks, singles, and doubles win ball games the vast majority of the time.  We want small, incremental changes that decrease costs and eliminate waste and are setting up systems to accommodate these “Quick Wins”.  These will always add up to more savings by the end of the year than one or 2 monster changes.  It could be that 5-7 small changes that fall under the same umbrella end up building to a huge savings at the end of the year.  If you were to try and not do 5-7 small individual changes and instead 1 big change that covers them all, the chances are far less likely that you’d be finished and complete by the end of the year.

David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.

Effectively, we are taking the standard Vertical corporation structure and breaking down the walls to create a horizontal structure.  So, rather than having a Planning/Scheduling department, a Purchasing department, a Production department, etc that are all working to their own metrics, we have a Value Stream that is responsible for the entire order to cash cycle of the products assigned to that Value Stream.  So, we have a value stream which consists of a full production line with team leaders and supervisors, a planner responsible for the planning of products on that value stream, a buyer responsible for making sure all parts are on order, a customer service rep responsible for making sure all orders are scheduled to ship accurately, and an overall Value Stream Manager responsible for the financial success/failure of the Value Stream.

The benefit of this structure is the team members assigned to the Value Stream are learning to be responsible for the products on their value stream.  We now have a team of all different disciplines living, eating, and breathing the products on their Value Stream.  Rather than focusing only on getting their specific job done, they now have a dual responsibility to make sure that their value stream is successful.  This has started to foster a team mentality within The Morey Corporation where any issue in the value stream, from an order through the shipment, is responded to immediately by any member of the value stream team (often by many members of the Value Stream).  Really, what this is doing is bringing employees closer to what makes the company money and ties them closer to customer.

Sure, this change hasn’t occurred without its hiccups, but one of the benefits from this is that people like myself have such a far greater understanding of the operations side than we ever did before.  Consequently, our production supervisors and manufacturing managers are now even closer to the effects on our overall business.  It’s much more difficult to stomach a delay in production when you know the domino effect that this can cause in a lean environment.

It’s extremely interesting to see people who have never been involved with shipping product now understanding the entire order to cash cycle and how their problems or delays affect the entire flow of the value stream.  It used to be, like traditional companies, that a lot of people did not know how their specific job helped the company make money.  Through Value Streams, we have been able to tie people directly to shipping units to our customers.

David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.

Stopping of production lines is a quick way to raise a lot of attention when you have shipping dollars waiting every day for product coming off that line and any delay has an effect on shippable dollars and inventory expenses, not to mention throughput dollars.

But what happens when there’s a problem in an office environment?   Wait.  Literally.  Maybe place a call to someone and wait for a response.  Maybe an email.  Maybe stop by someone’s desk and see if they’re around.  In the mean-time, we wait.

It seems so easy for people to accept andons in a manufacturing environment and to understand that when a line stops, a lot of tension is created.  In the office, as we have discovered, it’s not always so easy.  We tend to view waiting for a problem to be solved as just something we’ve always done.

At Morey, we implemented andons in the office to immediately call attention to situations in a department that would stop a person from doing their work.  In Customer Service, it may be an issue that doesn’t allow an order to ship, or even be entered.  In the Planning department, it may be a delay on the line that is requiring an adjustment to the build schedule, or a component shortage that has shut down a line and is impacting a build/ship schedule.  In our Materials group, it may be a delay in getting a part on order that will eventually impact a build, and by default, a future shipment.

We follow the andon process the same that it would be followed on the floor by having a help chain and an escalation pattern.  We have used this to identify gaps in our systems that seemingly have always been there.  This has definitely been a challenge for us as we are uncovering age-old issues that have always been overcome.  The biggest challenge has been to convince people to NOT overcome them, but to raise the andon so we can identify it and fix it forever.

If you try this at your company, be prepared for a potential landslide of opportunities. Remember, this is a good thing.  But just exposing them is the first part.   Now, let’s fix them forever.  The gains will surprise you.

David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.

Essentially, we have pulled people together in a mini simulation where they have to build towers out of plastic blocks.  The first mode they go through is to set up a receiving line where they follow the current batch build process.  They are given “builds”, kits of material to build sub-assemblies similar to traditional manufacturers and then, when the “subs” are completed, they can build them into the towers.  All this is given through the standard manufacturing process of gathering parts from a stockroom and bringing them to a mock production area.  At the end of 30 minutes we identify how much money they have made by looking at the amount of towers built and “shipped” vs. the remaining in process material, vs. the amount of “labor” that they put into it, and finally the cost of bad quality.  The results are always discouraging.

We then allow them to make whatever changes they want.  This usually leads to the traditional manufacturing approach of throwing more people at whatever operation(s) seemed to be lacking.  This usually results in hilarious consequences because rather than quieting, the chaos continues to rise.

Finally we re-set up their line in a lean, one piece flow operation, and allow them to work off material stores.  I don’t want to spoil it, but there are noticeable differences in this method that extend beyond the money.  You don’t realize how draining it is on people when they can’t work because they are waiting and how this waiting leads to other problems, including human interaction issues.

David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.

Once I started thinking about this concept, I started to realize that while waste may be visible on the production floor (a product not moving, a stopped line, WIP), it’s just as prevalent in the office environment if you know what to look for.  If you follow a customer order for a product as it comes in the door to the time it leaves, just a fraction of that order’s life is actually spent on the production floor.  Now, think about all the time that order, in some form or another, spends sitting somewhere, waiting.

“Waiting” is the key non-value added waste in an office environment.  We see it in our every day lives – Waiting in line for the printer/fax, waiting for the drawings, waiting for approval, waiting for material.  How many office operations do you see where someone waits for a stack of orders/tickets/emails/requests to pile up before attending to them?  In essence, we have to build systems and lead-times around our waiting. What to do?

What we are doing in our office environment is to assess all the processes with the people actually performing the work.  Identify the waste in processes in every department – What is the time impact daily, weekly, or monthly?  Continue to ask the question “Why?”  Guaranteed, you will probably get to a phrase similar to “That’s how we’ve always done it” Typically, companies overload themselves so much with manual processes and waiting, that when business picks up, you have to hire new people just to continue to move all the extra waiting “waste” that piles up.

Look for the low hanging fruit.  Like baseball, focus on the singles and walks and not on the home runs.  At The Morey Corporation, we realized a quick savings when we looked at our shipping process and realized that a manually controlled shipping check requiring 3 departments input was slowing down shipping on a daily basis.  When we dug deeper, we identified that 3 departments were accommodating what was already a capability in our corporate computer system.  Once implemented, we freed up enough office time in 3 departments to equal about $25,000 in one year.  This was merely one quick waste elimination of a process that we had been doing for at least 10 years, but it immediately wetted the appetite for more!

David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.

Given that 2009 was so much of a challenge for everyone, a lot of manufacturers have been unwilling to add shifts, labor or capacity even though orders have steadily been increasing since December.  Everyone has taken a “wait and see” approach in case the increases are just a blip on the radar.  Because of this, the only natural evolution is that as orders increase, the lead-times for parts increase.  So, we have seen our orders for parts we need to build greatly increase in lead-time.  In one instance, we were notified that a part due on our dock in 4 days would not arrive until September.  September!

How do we get around this?  First and foremost, work closely with the customer.  Letting the customer know the issues we are seeing may result in A) An offer to help, B) an unknown alternative surfacing, or C) a collaboration within the customer that yields help.  Too often, companies are hesitant to let a customer know that they are having any sort of issue until they have exhausted every last opportunity and missed on every last wish/hope.  Generally, at that time, most companies let the customer know and it is far too late for the customer to make any alterations to their schedules.  This usually leads to the first question of “How long have you known about this?” followed closely by “And you’re just telling us now?”

As we continue our lean journey, we are using these types of circumstances, when they do pop up, to investigate internally how it would be handled in a lean environment and countermeasures to use to avoid such instances.    From such tools as buffer inventory against vendor lead-times to pull replenishment on parts, we are able to better position ourselves to accommodate customer increases.  But if, and only if, we are in constant communication with our customers and vendors as partners, will we succeed.

David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.

“The goal is to inspire a new generation of viable, safe, affordable and super fuel efficient vehicles that people want to buy.”

By super efficient they mean to exceed 100 MPGe (miles per gallon equivalent). What is at stake is $10 million USD in prizes, to be awarded to the winner that can demonstrate a vehicle that is:

• Able to achieve 100 MPGe
• Production ready, not concept only vehicles
• Practical
• Sustainable both in technology and operation

Tall order, and believe me when I tell you no small task. The teams participating have a significant effort on their hands. Many variables to control, and much data to both prove and substantiate claims for meeting the requirements. Currently the EPA performs or requires performance testing in a strictly controlled environment…which is fine for the current standard vehicles…not so great for the very innovative designs potentially being brought about. Not to mention the rigorous conditions that are being set to measure “non-standard metrics”. How then do we ensure compliance in real time under real test conditions? Even better how do we empirically “level the playing field” so that all data is collected under similar conditions and normalized accordingly?

To that, the Morey Corporation has been charged (no pun intended) with providing the Morey MT-30 telematics system for the events. Referred to as the DAS (data acquisition system) for the competition, the system will collect multiple sensory data and performance parameters in real time and both securely store the data on board the DAS device as well as forward the data via wireless cellular technology to a remote server. Either way only authorized judges will have access to the raw data, but the status of each vehicle will be made available on-line [http://www.fuelourfuturenow.com/team.cfm ]. I am not sure when that will be available but if you visit the main site I am sure they will be able to give you more.

I am often asked by friends and family my opinion on the topic of  “global warming” and whether or not fossil fuels are or are not to blame. My answer? The same…I don’t know, how can anyone really? But should how/if/why global warming does or doesn’t exist be the real issue? I don’t think so, what I believe is that we are all charged, during our life time, to be good stewards of our world.

I recall a time when people threw garbage out of their car window as they rolled down the highway. I also recall back in the seventies those Saturday morning cartoon commercials telling us to “give a hoot don’t pollute”. I ask you , today if you saw someone throw out their garbage out of their car window would you be okay with it? I think not. So I guess it doesn’t matter what I or anyone of us believes, it does however matter what we each do. I’m energized (sorry), and proud to be part of the Progressive Insurance Automotive XPRIZE competition because they are doing the right thing.

I give a “hoot” and so should you.

See you on the other side. …73.

The great recession has hit U.S.-based manufacturing companies hard. To stay in the game, EMS providers have cut costs and balanced production with customer demand. Even with all of these changes, quality assemblies must continue to come off the SMT line. Chris Murphy, The Morey Corporation, shares strategies for quality-centric assembly in new and long-term client relationships.