The Company
Kenmore Envelope Company, Inc. was founded in 1969 and currently employs 85 workers at the Richmond facility. Kenmore converts large, medium and small envelopes from all papers, with special windows. They offer large format offset sheet fed, jet press and enhanced flexo printing. Capabilities include digital pre-press, die cutting and folding.

The Situation
With the recent economic downturn, Kenmore had experienced several years of flat sales and declining profits. Consolidations of regional financial institutions had resulted in the loss of several large accounts. Steep seasonality was an annual challenge with several months of excess capacity resulting from slow demand, followed by a busy season that was often chaotic. Like most businesses, competitive pressures in the market presented pricing challenges.

The Response
In early 2002, Kenmore was referred to GENEDGE ALLIANCE Project Manager John Hudson by a private-sector consultant that knew of GENEDGE ALLIANCE's expertise in Constraints Management and Lean. Kenmore's president spoke to another company CEO who provided a positive reference, based on their work with GENEDGE ALLIANCE and Owen Kingman, one of their private-sector providers.

Kenmore's CEO agreed with GENEDGE ALLIANCE's recommendation to use an intervention team of experienced Constraints Management and Lean experts including Mr. Kingman and appropriate GENEDGE ALLIANCE project managers. The team provided all employees with a one-day educational overview that demonstrated the principles of Lean Enterprise and Constraints Management. Three sessions of this "High-Impact Lean and Constraints Management" workshop were delivered, with 20 Kenmore employees per event.

To gain control of operations, the GENEDGE ALLIANCE intervention team helped Kenmore establish a new scheduling approach that focused on the constrained resources, with rules to protect the schedule.

The logistics of purchasing were improved, resulting in a significant reduction in paper inventory. A Total Productive Maintenance (TPM) program was instituted, including scheduled preventive maintenance. This improved productivity of the constraints and manufacturing by over 20%.

An enhanced pricing strategy was developed that calculated the Total Variable Cost (TVC) and Throughput dollars for all quotes and orders. "Octane" or Throughput dollars per constraint hour was determined for the primary types of jobs in the product mix. The new strategy strives to maximize octane, especially when operations are fully loaded. This strategy was implemented with noteworthy success by a new sales professional and other members of the sales team.

The Results
The changes that Kenmore implemented positioned them well for the improvement in the general economy. Significant improvements in profitability and sales have occurred. Annual sales have increased by 20% to 25%. Profitability has improved dramatically over the year before implementation and Kenmore has added 27 new full-time jobs.

Management's Comments
Kenmore President Rhett Riddle says, "Kenmore's on-going relationship with GENEDGE ALLIANCE has helped to strategically direct our sales efforts in a better manner and to gain more leverage in the control of internal operations by focusing management on our capacity-constrained resources."

View their site! http://www.kenmore-envelope.com/