Company
Established in 1927, Great American Shelving (GAS) Company, Inc. is headquartered in New York City. Great American's manufacturing facilities are located on 17 acres in Lynchburg, VA. The 60-employee plant produces steel and steel-wood shelving units for the contract furniture industry including innovative, economical and effective storage solutions for libraries, file rooms, conference rooms, storage rooms, and mail rooms.

Situation
GAS had been experiencing a strong growth in sales in past years. The production capacity was almost at its limit. In an effort to expand capacity to accept increased sales, the company was prepared to invest in a $1.5 million expansion project. Company management attended a one-day seminar in lean manufacturing principles, conducted by VPMEP. As a result of this seminar, the management asked VPMEP to help implement lean principles in their plant.

Response
GAS sought to expand production capacity by changing its style of work to incorporate lean principles. The expansion was to be achieved by identifying, and eliminating non-value added work activities and increasing the plant throughput. The lean implementation would take on a two-phased approach.

Phase one would start with VPMEP educating key supervisors and lead operators in lean manufacturing. Next, an assessment of the production operations would identify the key work centers and the bottleneck work centers to compare against lean principles. The panel shop department was designated as the pilot work center for applying lean manufacturing techniques. An implementation schedule was developed for the pilot center. VPMEP provided ongoing guidance and support for the pilot implementation effort.

The first step in the lean transformation in the panel shop was to develop a Value Stream Map (VSM). The VSM showed the current flow of products through the work center and identified key areas for using lean techniques to improve the flow. The VSM provided a benchmark of the existing production style. A company Lean Coordinator was selected as the internal project manager. VPMEP Project Manager, Jim Tate, worked with the manufacturing management and the Lean Coordinator to incorporate lean techniques in the panel shop. At regular intervals, the production through put volume, inventory levels, quality levels and costs were compared to the original benchmark performance.

Phase two would later involve transferring the implementation program, for lean principles, from the pilot work center to the remaining work centers within the plant.

Results
Significant financial benefits as a result of the lean implementation were in the following areas:
• 45% reduction in inventory,
• space reduction by 50%,
• shorter lead times, reduced from 4-6 weeks to 1 week,
• reduction in labor costs as a result of the elimination of production over time,
• lower operating costs,
• scrap reduced by 80%,
• and higher gross profit margin by 25%.
• As a result of the implementation of lean concepts at the GAS plant, the planned $1.5 million expansion was canceled.

Testimonial
"VPMEP showed us how to make better use of our equipment and employees to gain substantial performance improvement at GAS."
-David Biggs, VP Manufacturing

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